Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

CITY OF WESTMINSTER BILL [Lords] (By Order)

Order for consideration, as amended, read.

To be considered on Thursday 20 April.

QUEEN MARY AND WESTFIELD COLLEGE BILL (By Order)

Order for Second Reading read.

To be read a Second time on Wednesday 19 April at Seven o'clock.

Oral Answers to Questions — TREASURY

Marriage (Financial Incentives)

Mr. Steen: To ask the Chancellor of the Exchequer if he will provide a series of financial incentives to marriages which last (a) 10 years, (b) 20 years and (c) 30 years. [15275]

The Financial Secretary to the Treasury (Sir George Young): While I strongly believe in the institution of marriage, I see difficulties in introducing the concept of a loyalty bonus into the married couple's allowance.

Mr. Steen: The Government offer a disloyalty bonus to broken marriages by providing all sorts of state benefits. Although virtue has its own reward, in a highly materialistic society surely we should give some reward to those people who follow Government policies. Just as there are financial incentives to preserve the environment by using unleaded petrol, for example, could we not have some financial incentive for those who preserve the family, such as an anniversary award for those who stay married?

Sir George Young: A marriage that endures happily for 30 years is its own reward. I am not sure whether the Inland Revenue could significantly enhance that reward. We certainly use the tax system to influence economic behaviour, but I pause before accepting my hon. Friend's proposition that we should use the tax system to encourage people to like each other and continue to live with each other.

Mr. Ashton: If the Minister cannot give financial rewards to people like me with 37 years' service, could

he hand out a tin hat and a medal and arrange for a day such as VE day when we can celebrate the battles and wars that we have had and enjoy a proper anniversary?

Sir George Young: I hope that the hon. Gentleman and his wife have the ingenuity and the resources to celebrate each year of their infinitely happy marriage. I am sure that in the current framework of the Labour party he would not want to advocate any expenditure of public money on celebrating his marriage.

House Price Inflation

Mr. Duncan: To ask the Chancellor of the Exchequer what representations he has received which suggest that renewed house price inflation would divert resources from productive investment; and if he will make a statement. [15276]

The Minister of State, Treasury (Mr. Anthony Nelson): It is generally recognised that rapid house price inflation would be detrimental to productive investment.

Mr. Duncan: I thank my hon. Friend for that reply. Does he accept that for years people have been urging that the British economy should be run along strict German lines, but now that that is happening people are suggesting that we put up house prices to make people feel better? Does he accept that democracy has a straightforward choice: it can either vote for long-term economic well-being, or it can fall for the tricks of the Labour party and be bought by cheap promises? Will he undertake to go up and down the country extolling the virtues of what we are doing now?

Mr. Nelson: My hon. Friend makes a very good point. Of course the Government want a sound and healthy housing market and a thriving construction industry, but at the end of the day the country cannot live on bricks and mortar. Productive investment requires assets to be devoted to that area. My hon. Friend makes the point very well and I hope that it will be heard.

Mr. Pike: While no one wants an uncontrolled rise in house prices, which causes problems, does the Minister accept there is a serious problem for the many people with negative equity who cannot sell their houses or move jobs and are in a cleft stick because of Government policy?

Mr. Nelson: The Government are concerned about cases of negative equity, but it is fair to point out to the hon. Gentleman, first, that the number of people with negative equity has declined by half. Secondly, the value of that negative equity has reduced by nearly two thirds. Thirdly, last year I announced a couple of measures on the transfer of security and the ability to borrow unsecured so as to enable people with negative equity to move. So the Government have done something about that to advantage.

Personal Disposable Income

Mr. Forman: To ask the Chancellor of the Exchequer what estimate his Department has made of the change in real personal disposable income in 1995–96; and whether he will make a statement. [15277]

The Chancellor of the Exchequer (Mr. Kenneth Clarke): At Budget time, I forecast growth of 1½ per cent. in real personal disposable income during 1995 as a whole.

Mr. Forman: That is welcome news. Does my right hon. and learned Friend accept that it is largely due to his determination and that of the Governor of the Bank of England to keep a tight lid on inflation, and to the Government as a whole pursuing policies which have improved the supply side of the economy, that people have been enabled to earn more in a productive way?

Mr. Clarke: I agree with my hon. Friend's analysis. Real disposable personal incomes, over and above the low inflation that we now enjoy, grew last year and they are forecast to grow this year. People can feel confident that this increase in prosperity is based on very sound and secure ground, precisely because we are pursuing the approach that my hon. Friend commends.

Mr. Gordon Brown: Does the Chancellor agree that millions of people are worse off under the Conservatives, first, because there have been 20 tax rises in the past two years, secondly, because of two mortgage rises in the past few months and, thirdly, because of the overcharging by water and electricity companies? Will he explain why no action has been taken on that overcharging until now? Does he agree that water companies—not just one, but all water companies—should be reducing their prices and that there should be a refund for past excesses?

Mr. Clarke: If the hon. Gentleman is trying to imply that people are worse off under the Conservatives since we came to power, that is an absurd claim, as he well knows. Average incomes are up by about 40 per cent. in real terms since we came in, whereas they crawled up, barely increased at all, when the Labour party was in power.
As for what is going on at the moment, it is true that the last few tax increases in the pipeline will cost the average family about £1.10 a week when they come into effect in April. Nevertheless, over and above that, people's disposable incomes will rise. Somebody on average earnings and with an average mortgage has seen their disposable income, after their mortgage, go up by almost a quarter since 1990. So living standards are rising and will continue to rise under the Conservatives.
On water companies, as the hon. Gentleman knows, it is a balance between the investment, which is at last coming in through privatisation. Investment was neglected when they were state owned, but it is now raising our water quality, improving our drainage and services, and the prices have been reduced by competition. The old state-owned water industry did not serve this country well, and it is absurd to single that out to try to damage the impressive evidence that I have given the hon. Gentleman of rising living standards in this country.

Mr. Yeo: My right hon. and learned Friend refers to the abysmal performance of the Labour party in failing to increase real personal disposable income in 1974–79. Can he think of a single policy advocated by the Labour party which would make it do any better next time?

Mr. Clarke: It is rather difficult to think of a single policy advocated by the Labour party full stop. If I may, I shall judge the Labour party by its actions. It has voted

against all our attempts to raise revenue and against all our attempts to cut public expenditure. It has given no clue that it has given any thought to the level of public borrowing, and it would plainly disregard inflation. This country would be in deep recession and people would face reduced living standards if we had taken the slightest notice of such hints of interest as have come from Members on the Opposition Front Bench.

Mr. Skinner: Is the Chancellor aware that when the Tories came to power in 1979, out of disposable income the amount that the average family owed in debts of one kind or another was 45 per cent? After 15 years of a Tory Government, that has now risen to well over 100 per cent. That is why people realise that there is no feel-good factor because, like the country, most of them are up to their necks in debt. They are living on tick.

Mr. Clarke: That is a quite ingenious but wholly selective use of figures. The real incomes of people, every section of society in this country, are substantially higher now than they were in 1979. When the Labour party was in power, we were an industrial laughing stock. The country was suffering from stagflation, and the real living standards of people rose by barely 1 per cent. per year. Since that time, they have taken off and real disposable incomes are about 40 per cent. higher than they were then.

Mr. Nicholas Winterton: While I very much appreciate the sound way in which my right hon. and learned Friend the Chancellor is seeking to manage our economy and to keep inflation under control, is he not aware that the construction and housing sectors of our economy—which are of immense importance to the economy of this country as they purchase from practically every manufacturing sector—are in deep decline? There is a crisis and we need a regeneration of confidence in that area, not to increase house prices as rapidly as happened in the late 1980s, but to get some confidence back into that sector of the economy. What can my right hon. and learned Friend do to achieve that?

Mr. Clarke: I do not agree that there is a crisis or that those sectors are in decline. However, my hon. Friend makes a serious point: the housing and construction market is completely flat, which makes economic judgments very delicate. We must sustain the strong recovery, particularly in manufacturing, we must ensure that unemployment continues to fall, and for that we must have low inflation. The recovery is unbalanced, with manufacturing and exports doing well and housing and construction very flat. I believe that growing consumer confidence—people's growing feeling of security in the future of their jobs and the fact that mortgage rates are so much lower than they were in 1990—will create enough pent-up demand to make the housing market move. I should be wary of any artificial stimulation, which would have the effect that my hon. Friend the Member for Rutland and Melton (Mr. Duncan) warned us against and return housing prices to unrealistic levels.

Mr. Wigley: Does the Chancellor accept that there is a massive disparity between personal incomes in different areas? In Gwynedd—my own county—Dyfed and Mid-Glamorgan, gross domestic product per capita is now


lower than the average in the Irish Republic. What will the Chancellor do to try to ensure that areas which have fallen behind can catch up?

Mr. Clarke: There have always been discrepancies in earnings and living standards in different parts of the country, but comparisons between living standards—which are what matter—must be made very carefully, especially when borders are involved, because exchange rates and so forth must be taken into account. In most parts of the United Kingdom, actual disposable incomes in terms of purchasing power compare very well with those in most of Europe, and we have a high level of consumption. The old regional disparities have changed greatly in many ways, as we see when we examine actual economic activity. Another healthy feature of the current recovery is the fact that there is no longer a performance gap between the north, Scotland, large parts of Wales and south-east England.

Public Sector Borrowing Requirement

Mr. Spellar: To ask the Chancellor of the Exchequer what is his latest estimate for the public sector borrowing rate for this financial year. [15278]

The Chief Secretary to the Treasury (Mr. Jonathan Aitken): We anticipate that the PSBR for 1994–95 will be in line with the Budget forecast of £34.5 billion.

Mr. Spellar: I am not surprised that the Chief Secretary did not want to elaborate on that answer. This is one of a long series of deficits: under the current Prime Minister, the national debt has almost doubled, from £155 billion to £285 billion. Are not the Government living on tick?

Mr. Aitken: My reply to the hon. Gentleman is that people and parties living in glass houses should not throw stones—[HON. MEMBERS: "Oh!"] Let me remind him that under the last Labour Government the PSBR averaged 6.8 per cent. of GDP, reaching 9.4 per cent. at one stage. That was the moment at which the bailiffs had to be called in, in the shape of the International Monetary Fund. Under the present Government, the PSBR has averaged 2.75 per cent., and we are on track to eliminate it completely before the end of the decade. Our Government are a Government of good housekeeping, and they are doing well in reducing public borrowing.

Mr. John Townend: As a believer in a balanced budget, my right hon. Friend will appreciate my pleasure in congratulating him on the speed with which the PSBR is falling. Does he agree, however, that the best way to bring it down in the future is to cut spending rather than increasing taxation? Will he launch a crusade against waste, overmanning and extravagance in the public sector at both local and national level?

Mr. Aitken: I am certainly willing to join my hon. Friend in his admirable crusade. Indeed, we have already made progress. I remind my hon. Friend that in the last Budget my right hon. and learned Friend the Chancellor announced cuts in public spending which have reduced our spending plans for the next three years by £29.5 billion. That included a great deal of rooting out waste and cutting unnecessary bureaucracy: for example, Government running costs over the next three years have been reduced by 10 per cent. in real terms, and we now

have the smallest civil service since 1939. We are progressing in the direction that my hon. Friend recommends.

Mr. Harvey: If the Government's determination to reduce excessive borrowing is the reason why they are going ahead next week with tax rises equivalent to 1p on the basic rate, and if it is responsible and necessary to put taxes up next week, could it possibly be responsible to bring them down again in November?

Mr. Aitken: The PSBR reduction has been a difficult process involving tax rises as well as spending cuts. The PSBR is now on a virtuous downward path. The Government would very much like to return to their core belief of reducing taxes and we shall do so as soon as it is prudent and right to do so.

Mr. Congdon: May I congratulate my right hon. Friend on his success in reducing the PSBR and urge him to continue his efforts to reduce public spending, which is still too high? Does he agree that people—and not the state—know best how to spend their money?

Mr. Aitken: I could not agree more with my hon. Friend. The crusade that has been announced by one Back Bencher this afternoon is gaining recruits fast. It is essential that we reduce public spending to allow more money to be kept in the pockets of our citizens and taxpayers.

Mr. Andrew Smith: Given the importance of the right hon. Gentleman's responsibilities for the PSBR, and the importance of his office, does he believe that he now has the confidence of the country?

Mr. Aitken: Yes, I do, and I believe so because the facts are clear. I welcome this opportunity to reiterate them, since the hon. Gentleman has challenged me. Let me make it crystal clear that at no board meeting of the company that I was on the board of seven years ago, and in no board paper of that company, was I ever given the slightest indication or information which could suggest that the company's wholly legitimate contract with Singapore might subsequently result in components being shipped to Iran. My view of these matters has now been publicly supported by four former directors of the company, including General Isles, who was responsible for the contract, and the managing director, so the deposed and bitter chairman is now isolated on his own in making irresponsible comments. What we are seeing is an unholy alliance of a failed chairman and a failing newspaper: it is no reason to challenge my integrity or my position in the Government.

Alcohol Smuggling

Mr. Alexander: To ask the Chancellor of the Exchequer what progress Customs and Excise has made in the past 12 months in tackling cross-border smuggling of alcohol. [15279]

Mr. David Atkinson: To ask the Chancellor of the Exchequer how many Customs and Excise staff are involved in front-line work to prevent the cross-border smuggling of alcohol. [15280]

The Paymaster General (Mr. David Heathcoat-Amory): Customs and Excise has some 250 staff employed directly to prevent cross-border smuggling


of excise goods. There is no separation of their duties between alcohol and tobacco goods. They take vigorous action against those engaged in cross-border smuggling, and in the 12 months to 31 January 1995 they made 910 detections related to alcohol with a revenue value of £1,871,000.
Investigation staff and those employed on VAT and other customs controls also contribute to the prevention of smuggling.

Mr. Alexander: I thank my hon. Friend for that reply. He will be aware of the adverse tax implications of that activity. I assure him that there are adverse implications for the brewing industry due to severe inroads into its turnover. Will he assure the House that, to deal with that activity, the number of front-line staff will be increased rather than reduced—as some people think may happen—and that there will still be enough of them?

Mr. Heathcoat-Amory: Yes, I can give my hon. Friend that assurance. The fundamental expenditure review that we have completed shows that in some regions Customs and Excise can maintain or increase its output with fewer staff, but in the coming year there will be an increase in excise verification officers engaged in anti-smuggling activity. The matter will be kept under review to ensure that it is controlled.

Mr. Atkinson: Will my hon. Friend confirm that he and his European Union colleagues remain committed to the introduction of the harmonisation of duties, as well as of VAT, throughout the single market, which is the only long-term solution to the problem?

Mr. Heathcoat-Amory: I would go halfway with what my hon. Friend says. We would certainly wish to retain our veto over unwelcome tax proposals, so we would resist compulsory harmonisation. Within that constraint, however, we are working to lift the minimum rates of duty, especially for wine and beer, in order to iron out the current distortions between member states in the single market.

Mr. Roy Hughes: There is a large modern brewery in my constituency and the company which owns it complains bitterly about this illicit trade. Does the Minister accept that it could eventually affect employment, and is he examining the problem from that angle?

Mr. Heathcoat-Amory: Yes, we monitor closely the performance of the brewing industry and we are mindful of the employment consequences. I can therefore give the hon. Gentleman the welcome news that excise receipts from alcoholic drinks as a whole have kept up and are buoyant as against 12 months ago.

Mr. Mudie: In view of the Minister's complacent answers, may I ask whether he is aware of the pressure being put on thousands of small businesses—the difficulties were initially in the south but have now spread to the north—which are having great problems holding themselves together because of smuggling? Is he satisfied with the number of customs officers? In view of the pressure on small businesses, will he announce moves to increase the number in an attempt to prevent smuggling

and give a more forceful answer in respect of the equalisation of duty, which is the real long-term solution to the problem?

Mr. Heathcoat-Amory: I have already dealt with harmonisation. We wish to see a measure of harmonisation, but it must be compatible with our ability to veto other unwelcome taxation measures. I assure the hon. Gentleman that we are not in the slightest bit complacent about smuggling. We keep the matter under review, and I am glad to say that the courts are taking an increasingly severe view of those caught smuggling. The law already allows for unlimited fines and up to seven years' imprisonment for those who are caught.

Far East

Mr. Key: To ask the Chancellor of the Exchequer what representations he has received from Ministers and business men in the far east regarding the prospects for Britain's future economic success. [15281]

Mr. Kenneth Clarke: I regularly meet Ministers, officials and business men from the far east. Britain's good economic prospects always feature strongly in my discussions with them.

Mr. Key: In little more than a decade, China will be the world's biggest economy. Is not the dramatic rise in Britain's exports to China in the past couple of years proof of the effectiveness, efficiency and competitiveness of our economy in the world?

Mr. Clarke: I agree with my hon. Friend. I am extremely glad to say that exports to China rose by 70 per cent. in the last year for which we have full figures alone. China is now one of the most dynamic economies in the world. It is a sign of how much Britain has changed over the past 16 years that British business and industry is now competitive and so effective in taking part in the affairs of that part of the world which has the most dynamic economies.

Mr. Stevenson: Is the Chancellor aware of the flood of investment from this country to the far east? For example, Royal Doulton in my constituency has just announced its intention to build a factory and create 600 jobs in Indonesia. Is he concerned about this so-called out-sourcing? How is it in Britain's interests? Is it not just another example of the export of jobs?

Mr. Clarke: The abolition of exchange controls and the opening up of investment from this country overseas and into this country by overseas investors is one of the most dramatic and beneficial changes that the British economy experienced in the 1980s. The hon. Gentleman epitomises just how old-fashioned the Labour party is in its approach to these matters. This country benefits from investment by Japanese, Korean, American and European companies. It also benefits from the flowing back into this country of what is earned from investment by British companies overseas. Indeed, we have now restored the old level of investment that Britain used to have before its past portfolio went during the wars, and the flows into this country are extremely valuable—as valuable as visible trade to the well-being of this country.

Mr. Marlow: As an avid reader, has my right hon. and learned Friend read the very interesting article in today's edition of the Daily Mail by Mrs. Fukuda, vice-chairman


of a major Japanese investment bank, Nikko Europe, in which she says that she suspects that Japanese investors would be happier if Britain stayed outside the single European currency? Is that a fit subject for discussion with his hon. Friends and, if so, is his door open?

Mr. Clarke: I am sure that there is a range of opinion on these matters in Japan as there is in this country. I would be happier if the Japanese lady would wait until the single currency has been designed—[Interruption.]—until we have seen whether Britain is likely to join it and when we have an altogether better basis on which to make a decision on that event if and when it ever occurs. At the moment, I think that Japanese opinions are mixed. Certainly, our involvements with Europe and in south-east Asia are both essential to the continued success of this country in the world economy.

Mr. Corbyn: In his discussions with business men in the far east, does the Chancellor of the Exchequer ever raise the subject of the use of prison labour and child labour and of human rights abuses in the economic zones of China that he is so quick to praise? Will he link Britain's trade relations with China with the urgent need for a review and improvement of that country's abominable human rights record in those areas?

Mr. Clarke: I have never been to the People's Republic of China, so I have never had an opportunity to raise the matters to which the hon. Gentleman refers. Every hon. Member is of course against slave labour, child labour, prison labour for export and the other things that the hon. Gentleman described. Our trade with China is extremely beneficial to this country—straightforward trade and investment, which is of great benefit to the people of this country. We look forward to China becoming a successful, free-market economy and a more liberal and democratic society, which increased prosperity there will tend to produce. Britain should be a close trading and investing partner with that country.

Income Tax

Sir Fergus Montgomery: To ask the Chancellor of the Exchequer how much money would be raised by an increase in the top rate of income tax to 50 per cent. [15282]

Sir George Young: In 1995–96, £2.9 billion and £4.6 billion in a full year.

Sir Fergus Montgomery: Does my right hon. Friend agree that higher income tax rates reduce incentives to work hard and that they limit economic growth? Will he perhaps refresh my memory as I have forgotten what the top rates of income tax were when the Conservatives rescued this country from socialism in 1979?

Sir George Young: I am happy to refresh my hon. Friend's memory. Some people were paying tax at 98p in the pound under the Labour Government. [Interruption.] I hear cries of "Not enough" from Opposition Members. We have reduced the top rate to 40 per cent. and we have increased incentives. The higher paid are now paying a higher percentage of the total income tax, so the lower paid have benefited from the reforms.

Ms Armstrong: Will the Minister confirm that once the changes in taxation are implemented next week,

additional tax under this Government will be the equivalent of 7p in the pound on the basic rate of income tax?

Sir George Young: The average family is about £80 a week better off in real terms since the Conservative Government came into office in 1979, which is a dramatic contrast with the virtually stagnating rate of growth under the last Labour Government.

Mr. Jessel: Far from suggesting an increase in the top rate or any other rate of income tax, will my right hon. Friend bear in mind that income tax produces only about a quarter of all Government revenue? The Chancellor of the Exchequer in the early 1950s, Mr. Butler, made it a Conservative target to double the standard of living in 25 years, which was achieved. Should we not make it our target, over 25 years, to abolish income tax lock, stock and barrel?

Sir George Young: My hon. Friend invites me to subscribe to an ambitious target. He will understand that it would be wrong for me to prejudge my right hon. and learned Friend the Chancellor's Budget later this year.

Third-world Financial Markets

Mr. Livingstone: To ask the Chancellor of the Exchequer if he will made a statement about the impact of the decline in the bond market and third-world stock markets on prospects for the United Kingdom economy. [15283]

Mr. Nelson: The United Kingdom economy remains fundamentally healthy, with sound prospects. The decline in world bond markets last year and recent falls in some third-world countries' stock markets are unlikely to have a material effect on the United Kingdom economy.

Mr. Livingstone: Have the Government considered the fact that one of the reasons preventing the decline in third world stock markets from feeding through into the British economy, and ours from following them down, is that it is still easy to borrow cheaply in Japan to invest in the stock market here, which is sustaining stock market levels? As the money supply in Japan increases, inflation takes off and interest rates rise, that restraint will be cut out and our stock market will decline and precipitate another recession.

Mr. Nelson: The hon. Gentleman seems to have omitted the subject of exchange rates, which certainly have some bearing on borrowing in one country and investing in another. I dare say that the proposal that he has just made would not have been profitable for anyone who had taken his advice. There is plenty of investment in this country from abroad. We take the lion's share of investment in Europe, and that is regenerating growth in our manufacturing industry and capability. Our prospects are sound. In decrying the prospects for this country, the hon. Gentleman fails to mention that in the last quarter of last year we had a current account surplus, for the first time in eight years, of £800 million. Surely he would do better to welcome statistics of that sort.

Mr. John Greenway: Following what my hon. Friend has said, does he agree that deregulation and the ability to invest internationally across the world has enabled this country's economy to grow significantly over the past 15 or 16 years? Are not the excellent trade figures published


last Friday, which my hon. Friend has just mentioned, the result of much of the international overseas investment by British institutions and companies? Will he ensure that Government policy is to permit that to continue, and to have no truck with the Labour party, which would favour more regulation that would close down those investment opportunities?

Mr. Nelson: My hon. Friend is spot on. Our healthy current account figures derive in large part from the investment return on substantial foreign investments made. One reason for that is the fact that the Government got rid of exchange controls early on. The consequences of what is proposed by the hon. Member for Brent, East (Mr. Livingstone), who speaks for old Labour, would be the reimposition of exchange controls, capital controls and, presumably, penal rates of taxation on investment income.

Single European Currency

Mr. Milburn: To ask the Chancellor of the Exchequer what is the extent of the Government's participation in the practical steps needed to create a single European currency. [15284]

Mr. Kenneth Clarke: As I have said before, we are playing a constructive part in the technical preparations, but that does not prejudge our decision on whether to participate, which is protected by the United Kingdom opt-out.

Mr. Milburn: But which Minister speaks for the United Kingdom Government in the discussions? Is it the right hon. and learned Gentleman, the Euro-supporting Chancellor of the Exchequer, or is it his comrade in arms, the Euro-sceptical Chief Secretary to the Treasury? How can Britain's national interest be properly represented when members of the Cabinet are in such open disagreement over European policy?

Mr. Clarke: I advise the hon. Gentleman to keep a straight face, even when asking frivolous questions. The last time that we debated the subject the Prime Minister made our position clear. We have negotiated an opt-out which means that the British are quite free from treaty obligations when deciding whether to join in economic and monetary union if the other member states ever decide to go ahead with it. Meanwhile we play a constructive part in the technical preparations, so that when we make our choice, if ever we have to, we have had some hand in designing what we are being asked to confront.

Mr. Legg: Will my right hon. and learned Friend accept my congratulations on the excellent improvement in our trade figures, and will he further accept that that improvement is largely due to his policy of maintaining a floating currency? Does he agree that such a marked improvement in our trade policy would not have been possible if we had remained in the exchange rate mechanism at DM2.90 to the pound, and that it certainly would not have been feasible under a single currency?

Mr. Clarke: I agree with my hon. Friend in his praise of our trade performance—in 1994 we performed spectacularly well—but I disagree with him if he believes that devaluation of the currency is the only way in which this country's competitiveness has been restored. That happened because of the success of British industry and

commerce in making itself competitive in world markets, and the Government's success in keeping down inflation at home and our business-friendly policies that support exports overseas. If my hon. Friend analyses the trade figures he will find that the myth that it all happened only because we left the ERM is no longer sustainable.

Mr. Gordon Brown: Does the Chancellor still reject a referendum ever being held on a single currency—yes or no?

Mr. Clarke: If the question ever arises, it will be a matter for the Parliament of the day to decide how to take the decision.

Mr. Budgen: May I refer the Chancellor to his remarks of 10 days ago, in which he said that the Euro-sceptics formerly in his party were undermining the value of the pound? If that is true, will he explain why it is important, or does he have some secret exchange rate target so as to bring us back into the ERM which he so much favoured?

Mr. Clarke: My hon. Friend produces about the fifth or sixth version of what I said in a press conference in Brussels when I was asked why the pound at the time was declining when I was confident that the economic fundamentals in this country were going very well. One of the remarks that I made was that I accepted that the divisions in the governing party about Europe were not exactly helpful to market confidence. That has been turned into my personally blaming Lord Tebbit for the decline in the pound, which was not what I was saying. The political uncertainty gives rise to some weakness occasionally in the exchange markets because people fear the return of a Labour Government. The more the Conservative party looks like a strong and determined governing party, which I believe will last the course of this Parliament, and maintains the present improving economic climate, the stronger sterling and the stronger confidence overseas in this country's economy will be.

Customs and Excise (Scott Inquiry)

Mr. Dalyell: To ask the Chancellor of the Exchequer what consideration he is giving to the protection of the reputation of Customs and Excise officers named by the Scott inquiry; and if he will make a statement on the doctrine of ministerial responsibility. [15285]

Mr. Heathcoat-Amory: We shall have to wait and see what conclusions Sir Richard Scott reaches and I do not propose to speculate in advance of the publication of his report.
As was made clear in the evidence of my right hon. Friend the Prime Minister to Sir Richard Scott's inquiry, the Government's view on the accountability of Ministers remains as set out in Sir David Maxwell Fyfe's speech to this House on 20 July 1954 on the Crichel Down case.

Mr. Dalyell: Since, in a reference that I sent to the Minister, the late Nicholas Ridley—not exactly the most uncritical admirer of the British civil service—pointed out that the Customs and Excise was due great praise for what it had done on the super-gun, can we be told what has happened to the doctrine of ministerial responsibility?

Mr. Heathcoat-Amory: Nothing has happened to the doctrine of ministerial responsibility. It is true, as the hon. Gentleman has reminded the House, that the late Nicholas


Ridley complimented Customs and Excise on its performance in the Iraq super-gun case. That compliment was fully deserved. As for any blame or criticism that may accrue under the Scott inquiry, we must await the publication of the report. However, I remind the hon. Gentleman that I, as a Treasury Minister, am responsible for the overall conduct and performance of Customs and Excise. It is an independent prosecution service and Ministers are not consulted on whether to investigate or prosecute in individual cases.

Mr. Darling: Arising from that, does the Minister accept that the Maxwell Fyfe doctrine has been changed and undermined by the conduct of the Government in the past 16 years? Will he give an undertaking that if he or any other Minister is criticised in the Scott inquiry, he will accept the consequences and resign forthwith?

Mr. Heathcoat-Amory: The answer to the hon. Gentleman's first question is no. In answer to his second question, I repeat that we must await the publication of the report.

Endogenous Growth Theory

Mr. Nicholls: To ask the Chancellor of the Exchequer what plans he has to pursue post-neo-classical endogenous growth theory; and if he will make a statement. [15286]

Mr. Aitken: The post-neo-classical endogenous growth theory is receiving the study it deserves.

Mr. Nicholls: I thank my right hon. Friend for that reply. What conclusion does he think that the public should draw when even the Labour hon. Member for Great Grimsby (Mr. Mitchell) realises that the post-neo-classical endogenous growth theory is a load of claptrap, but it is nevertheless accepted as official Labour party policy by the hon. Member for Dunfermline, East (Mr. Brown)?

Mr. Aitken: I always enjoy the sarcastic wit of the hon. Member of Great Grimsby (Mr. Mitchell), particularly when it is applied to his own Front Bench. The hon. Gentleman is a literary sort of bloke, and he will perhaps forgive me if I summarise his position by saying that the Labour party's endorsement of a growth theory is totally unnecessary. The Government do not need one because we have a growth reality of 4 per cent. last year. We have record exports and inward investment, and manufacturing investment is up by 4.4 per cent. Unemployment is falling by 1,000 a day. If that reality does not prove that there is no need for absurd academic theories, I do not know what does.

Mr. MacShane: Does the Chief Secretary agree that the best contribution that he can make to the theory of honest and incorruptible government is to resign his seal of office now?

Mr. Aitken: No.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. McKelvey: To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15305]

The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. McKelvey: Does the Prime Minister agree that the greatest asset of the national health service is the loyalty and dedication of its staff? He will know that many NHS workers are greatly angered by the fact that they will receive pay increases of between 1 per cent. and 3 per cent. this year. It is within the Prime Minister's power to lift the morale of 1 million people by agreeing that no one will be paid less than 3 per cent. this year. He has the power to do that. Why does he lack the commitment?

The Prime Minister: Of course the greatest asset of the NHS is the skills of the doctors, surgeons, dentists and nurses who work in it. There is no doubt about that. The hon. Gentleman is concerned about the 3 per cent. figure, and it may be that many people get precisely that sum. He may also recall that the last Labour Government cut nurses' pay by exactly 3 per cent.

Mr. Renton: Did my right hon. Friend note that the question asked by many non-political speakers at yesterday's "Britain in the World" conference was how could we expect other countries to think much of us if we evidently think so little of ourselves? While some modesty and humility is always welcome, does my right hon. Friend think that it would help British exports, and thus British jobs and morale, if politicians from all parties and the media spent rather more time praising evident British successes and less time indulging in destructive recrimination and criticism?

The Prime Minister: My right hon. Friend may have spoken for millions of people in the country when he called for a more balanced presentation of the many virtues which exist in this country in industry and in our traditional aspects and institutions. I have no doubt that many people would wish to support them.

Mr. Skinner: Stop whingeing.

The Prime Minister: I am sorry that the hon. Member for Bolsover (Mr. Skinner) regards saying anything good about this country as whingeing. That says rather a lot about the hon. Gentleman.

Mr. Blair: If, under the new nurses' pay scheme, substantial numbers of nurses get less than the 3 per cent. which other nurses get for effectively the same job, will he accept that such a system is unfair? Will he undertake to change it?

The Prime Minister: I cannot give that undertaking to the right hon. Gentleman. As I said a moment ago, nobody wishes to be unfair to nurses or anybody else in the health service—certainly no one in the Government. We gave nurses a review body of their own so that their interests


could be looked at dispassionately, and we have scrupulously honoured the recommendations of that review body in full.

Mr. Blair: The Prime Minister will know that the review body has pointed out that it was acting on the prompting of the Government.

The Prime Minister: indicated dissent.

Mr. Blair: That is what the review body says in its own report. Is the Prime Minister prepared to accept a situation where substantial numbers of nurses who are doing the same job are paid substantially less than 3 per cent?

The Prime Minister: I am sorry, but the right hon. Gentleman still does not understand the point. I shall make it to him again so that it is clearer. We have accepted the recommendations of the review body in full this year, as we have done every year in the past. The right hon. Gentleman must look at the actual offers which are being made to nurses as a result of local pay determination. The majority of those are in the order of 3 per cent. or more, and I am confident that that trend will continue. We set up the review body—which was welcomed by nurses—and it has made recommendations which I think we should stick to.

Mr. Blair: The Prime Minister cannot have it both ways. Either he believes—[Interruption.]

Madam Speaker: Order.

Mr. Blair: Either the Prime Minister believes that the nurses deserve 3 per cent., in which case he should deliver it, or he is content for many of them to be paid less than that, in which case he should have the honesty to say so. May I put it to him this way: if some nurses turn out just to get a 1.5 per cent. pay increase, when they already face mortgage and tax rises and the rest, is not the danger not just of a sense of injustice among nurses, but of yet another damaging blow to the morale of the national health service?

The Prime Minister: It is the right hon. Gentleman who is seeking to have it both ways. He and every hon. Member of this House agreed that it was right for there to be an independent pay review body for the nurses. That is what there is and we have accepted the recommendations that it has made and provided increased funding to the national health service—some £1.3 billion—so that pay awards of that sort can be met. That is the right way to deal with it; it is the way that we are dealing with it; and it is scrupulously fair. I notice that it was this Government who provided an independent pay review body for the nurses and not previous Governments.

Mr. Harris: Has my right hon. Friend found time to read the report in The Daily Telegraph, which shows once again how Spanish fishermen are plundering stocks, especially by catching undersized fish? Taking into account the events off Canada and the report by his special advisers, under Sir Crispin Tickell, will my right hon. Friend take a personal lead in the matter and try to bring some sanity back into this whole question of conserving fish stocks and ensuring that our fishermen have a future to look forward to?

The Prime Minister: I certainly understand and share Canada's desire to preserve fish stocks. That is a perfectly

legitimate concern and it is entirely right of Canada to seek to do so. The real issues here are allocation of the quota and enforcement—two separate, but related, issues. The allocation must clearly be resolved by negotiation. Good progress is being made and I see no reason why an accommodation cannot be struck.
Enforcement is clearly the key and we need tough rules that are enforced. Again, I understand that we are close to a deal. I believe that Canada is right to take a tough line on enforcement, but I hope that in taking such a line she does not undermine her own good case, which exists at present. There have been discussions about trade sanctions. We have made it clear that we would strongly oppose the imposition of such sanctions.

Mr. Nigel Griffiths: To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15306]

The Prime Minister: I refer the hon. Member to the reply I gave some moments ago.

Mr. Griffiths: Does the Prime Minister think that the director of a company that traded illegally with a foreign power is a fit and proper person to be in his Cabinet?

The Prime Minister: I believe that my right hon. Friend the Chief Secretary to the Treasury dealt with that matter very forcefully and to great acclaim from most of the House just a few moments ago. He has made his position absolutely clear. No evidence has been found to counter that, either by The Independent or anyone else.

Mrs. Ann Winterton: Does my right hon. Friend recall Lord Tebbit's definition of loyalty and commitment to a country as the side that one supports in, for example, a cricket match? Will the Prime Minister join me and this House, therefore, in cheering enthusiastically for Canada in its forthcoming fixture against Spain?

The Prime Minister: I believe that I am right to say to my hon. Friend that, in 1868 or 1874, Canada beat England at cricket in Canada. As I said a moment or so ago, I think that Canada is right to take a tough line on enforcement. She has our support in doing that and we shall not support the imposition of trade sanctions. This is an area where a satisfactory accommodation between the sides can be achieved, and should be achieved speedily.

Mr. Beith: To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15307]

The Prime Minister: I refer the right hon. Member to the answer I gave some moments ago.

Mr. Beith: Has the Prime Minister seen from today's Audit Commission figures that spending on education in secondary schools in Northumberland is lower than in any other county? As it is not possible to explain that by how the council allocates its resources because it results from the Government's spending formula applied in a scattered rural area and the capping limit on council spending, will the Prime Minister stop pretending that there is no problem and try to do something about it?

The Prime Minister: I think that many interesting things are thrown out by the Audit Commission report; not all of them would be very well received by the right


hon. Gentleman when he actually has the opportunity to study them. On the specific matter of education, I have made the point repeatedly to the House in the past and I reiterate it today: there is a question of priorities within the education budget. I do not believe that it is right for education authorities to look, as their first priority for making savings, at the classroom teacher. That is the last place to look, not the first.

Sir Peter Tapsell: To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15308]

The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.

Sir Peter Tapsell: May I welcome my right hon. Friend's reassertion yesterday of his absolute determination to continue to maintain Britain's role as a national power in international affairs? Will he give a commitment that, at the intergovernmental conference next year, he will veto any attempt to include the pillars of foreign and home affairs in the European Union in the supranational Rome treaty?

The Prime Minister: I am grateful to my hon. Friend for giving me advance notice that he planned to raise that detailed matter. I confirm that, at the IGC, what I wish to see is more effective intergovernmental co-operation between Europe's nation states to fight cross-border crime and promote joint policies internationally. But I shall make it absolutely clear on that occasion that Europe's foreign policy and home affairs pillars remain outside the treaty of Rome. The United Kingdom's right of veto on those matters is important to us. It is at the heart of national sovereignty and I shall protect it at the intergovernmental conference.

Mr. Dafis: To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15309]

The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.

Mr. Dafis: Does the Prime Minister agree that it is essential that, at the Berlin climate change conference, the need for significant reductions in greenhouse gas emissions after the year 2000 is explicitly stated and that we must have a decision to negotiate a reductions protocol to that effect? Does he further agree that, if current strong rumours that the UK and the European Union are prepared to compromise with the Americans and others on that fundamental principle, we shall all stand condemned by future generations?

The Prime Minister: The hon. Gentleman raises an important matter. My right hon. Friend the Secretary of State for the Environment will attend the Berlin conference and will call on all the developed countries to agree a figure of between 5 and 10 per cent. below 1990 levels for all greenhouse gas emissions by the year 2010. We believe that that represents both a credible and an achievable next step and demonstrates the commitment of

the United Kingdom to the framework of the climate change convention. I should say to the House that the United Kingdom is on course to meet current commitments under the convention, and we have been at the forefront of international work over recent years. We were the first country to present our programme up to the year 2000, and my right hon. Friend is now leading the way in calling for agreement on a realistic target up to 2010.

Mr. Batiste: Has my right hon. Friend seen reports in the papers this week that in the middle east seven drugs dealers were executed, but in Leeds a gang of drugs dealers burnt down the house of a black policeman? Is it not time that, in our war against drugs dealers, we treated them as the mass murderers that they are?

The Prime Minister: I believe everyone in this country shares the distaste for drug dealers to which my hon. Friend refers. As he will know, my right hon. Friend the Lord President has been preparing a comprehensive anti-drugs strategy, and the Government have already taken a number of initiatives in line with our European and other international partners. There is no doubt about the danger of that trade, and we will do all that we can, domestically and internationally, to help to stamp it out.

Mr. Janner: To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15310]

The Prime Minister: I refer the hon. and learned Gentleman to the reply I gave some moments ago.

Mr. Janner: As we approach the 50th anniversary of the liberation of the Belsen concentration camp by British troops, will the Prime Minister express what I am sure is the wish of us all—that there shall never be such a tragedy again? Will he also consider whether we should not be dealing rather better with Hitler's heirs in our own country—not least the thugs of Combat 18 and their ilk, who have been sending through the post to constituents of mine, Asians in the city of Leicester and elsewhere, racist, threatening and abusive cards and razor blades? Will he ensure that the police have the resources and the determination to deal with those awful people?

The Prime Minister: I agree without qualification with the hon. and learned Gentleman about that. Combat 18 is a repellent organisation. The literature that it circulates is utterly disgusting, and there can be no place for its type of politics in the United Kingdom.
As the hon. and learned Gentleman is aware, we have comprehensive anti-discrimination legislation. The Criminal Justice and Public Order Act 1994 introduced a new imprisonable offence of intentional harassment, which I hope will give the police more powers to deal with serious racial harassment. We are also making the distribution of racially inflammatory material an arrestable offence.
However, the best reassurance that we can give to victims is the one that the hon. and learned Gentleman mentioned, and that is to help the police to ensure that those people are caught and punished for their crimes.

Business of the House

Mrs. Ann Taylor: Will the Leader of the House state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The business for next week will be as follows.
MONDAY 3 APRIL—Progress on remaining stages of the Finance Bill.
TUESDAY 4 APRIL—Conclusion of remaining stages of the Finance Bill.
Motion relating to the infant formula and follow-on formula regulations.
WEDNESDAY 5 APRIL—Until 2.30 pm, there will be debates on the motion for the Adjournment of the House, in connection with which I remind the House that the first three hours, from 10 am until 1 pm, will be under the heading of "Matters to be Considered before the Forthcoming Adjournment" and will be comparable to the previous recess Adjournment three-hour debates.
Remaining stages of the Licensing (Sunday Hours) Bill.
The House will wish to know that, subject to the progress of business, it will be proposed that the House should rise for the Easter Adjournment on Wednesday 5 April until Tuesday 18 April.
TUESDAY 18 APRIL—Second Reading of the Environment Bill [Lords].
WEDNESDAY 19 APRIL—Until 2.30 pm, there will be debates on the motion for the Adjournment of the House.
Remaining stages of the Agricultural Tenancies Bill [Lords].
The Chairman of Ways and Means has named opposed private business for consideration at 7 o'clock.
THURSDAY 20 APRIL—Remaining stages of the Criminal Appeal Bill.
FRIDAY 21 APRIL—Private Members' Bills.

Mrs. Ann Taylor: I thank the Leader of the House for that information, and especially for the information about the week after Easter. I ask him to bear in mind the requests for an Opposition Supply day in the following week, so that Members on the Opposition Benches may draw attention to issues that they consider especially important.
As the Leader of the House has given information to the press recently with regard to the Government's long-term plans in another Queen's Speech, will the Leader of the House tell us today why the Government have not yet found time to introduce legislation to ratify the chemical weapons convention? May I make him an offer? The Opposition will co-operate fully in the speedy passage of such legislation, perhaps even taking all stages in one day. Could we make progress on that immediately after Easter?
In view of the widespread public concern about the recurring crises in the health service, particularly today's alarming reports that, since the new quango was put in charge of blood transfusion services, blood stocks have been reduced, operations are being cancelled and doctors are fearful of what would happen in the event of a major disaster, should we not be debating the issue before the recess so that our constituents can find out the true extent of the problem?
Finally, on a matter that must be of concern to hon. Members of both sides of the House, will the Leader of the House seek to resolve the questions, which were not clarified today at Question Time, surrounding the activities of the Chief Secretary to the Treasury in respect of defence contracts in the middle east? Will the Leader of the House ensure that an immediate, specific and independent inquiry is set up to look at the new allegations to ensure that Parliament has the chance to learn and assess the full facts surrounding the case?

Mr. Newton: On the latter point, the hon. Lady is well aware that my right hon. Friend the Chief Secretary has issued two full statements setting out the position clearly. He has added to that in exchanges today, and my right hon. Friend the Prime Minister has also referred to the matter in the past few minutes. I do not intend to add to what they have said.
On the national health service and the position in respect of blood, I understand that the National Blood Authority is coping with increased demand—up 4 per cent. last year—by increased donations—up 5 per cent. last year—and considerably better co-ordination between centres. If the hon. Lady wishes to raise other points in that respect, I draw her attention to the fact that my right hon. Friend the Secretary of State for Health is due to be answering questions on the first day back after the recess.
As always, I shall bear in mind the hon. Lady's request for an Opposition day, although I can make no commitment from the Dispatch Box this afternoon.
I said in response to a question from one of the hon. Lady's hon. Friends a week or two ago that the Government are firmly committed to making progress on the chemical weapons convention. The hon. Lady has made a generous offer this afternoon, which I shall certainly consider carefully.

Sir Terence Higgins: May we have a debate next week on a subject on which the House has not reached a decision: whether hon. Members should have in their rooms television sets showing what is happening on the Floor of the House? While that may be convenient for those writing constituency mail while watching what is happening on the Floor of the House, it may deplete the numbers attending in the Chamber. Until the public can see both the Floor of the House and hon. Members sitting in their rooms watching it, such a move may have a bad affect.

Mr. Newton: I understand my right hon. Friend's point, but I must make two points in reply. First, at many times of the day—for reasons that hon. Members understand and, no doubt, from time to time seek to explain to those outside—there is a relatively limited number of hon. Members in the Chamber participating in debates. There is nothing new about that. Secondly—and I say this with all due respect to my right hon. Friend, who is well versed in the ways and procedures of the House and its Committees—the proposal to provide the clean feed in the way that it is being done to offices throughout the Palace of Westminster and its associated buildings, was put to and agreed by the House.

Mr. Simon Hughes: We understand that announcements on the future of the health service in London are to be made very soon by the Secretary of State for Health. Can the Leader of the House tell us whether there will definitely be a statement about


that next week? If not, can he give us a guarantee that there will at least be an announcement by way of a statement in the House, if not next week, after the Easter recess?

Mr. Newton: I cannot give the hon. Gentleman a specific date at the moment. However, I know that my right hon. Friend the Secretary of State for Health will seek to make announcements at the earliest appropriate moment and I am sure that she will give careful consideration to representations about how that should be done.

Sir Dudley Smith: My right hon. Friend will be aware that the Government have promised to introduce legislation on aircraft noise at a suitable time. Is he aware that there is deepening anxiety in mid-Warwickshire about night aircraft noise that is generated at the small Coventry airport? In view of that fact, does he think that it would be a good idea to have a general debate in the House about aircraft noise as a precursor to introducing that legislation?

Mr. Newton: I am not sure about having a general debate on aircraft noise. However, I will undertake to bring my hon. Friend's concern to the attention of my right hon. Friends. I make the point that there was an Adjournment Debate about those matters not long ago which was introduced by an hon. Member whose constituency—like that of my hon. Friend—is in the vicinity of Coventry airport.

Mrs. Anne Campbell: Will the Leader of the House arrange to have an early and extremely urgent debate on the fate of Nicholas Ingram, a British citizen who was born in Cambridge in my constituency and who is currently awaiting execution by electric chair in the United States? The execution date is set for 6 April and the Georgia board of parole has said that it will listen with utmost gravity to any appeal that is made by the United Kingdom Government.

Mr. Newton: The whole House will understand and respect the reasons why the hon. Lady has raised the matter with regard to one of her constituents. I hope that she, in turn, will understand that at this stage it is appropriate for me to undertake to bring her comments to the attention of my right hon. Friends.

Mr. Nicholas Budgen: May I remind my right hon. Friend of the courteous and conciliatory way in which, on 11 January, he dealt with the unfortunate rift between the nine Euro-sceptics and the remainder of his party. He assured the House that on all occasions the nine would receive the full rights and privileges that were necessary for them to represent their constituents properly in this place.
In view of the grossly discourteous way in which the Chancellor of the Exchequer refused to receive his former colleagues, and the fact that we are still not even receiving the all-party Whip, will my right hon. Friend assure us and the House that every attempt will be made to ensure that we are able to represent our constituents properly?

Mr. Newton: I have three points to make. First, I am grateful to my hon. Friend for his references to the tone of my remarks during the debate to which he alluded. Secondly, on his point about the Chancellor of the Exchequer, I am sure that my right hon. and learned

Friend did not intend his actions to be interpreted in the way that my hon. Friend has interpreted them. However, it is clearly a matter for individual Ministers to consider requests for meetings and to make their own decisions about whether such meetings are appropriate in relation to particular matters at particular times. Thirdly, I will undertake to look into my hon. Friend's point about the all-party Whip.

Mr. D. N. Campbell-Savours: May we have a debate on parliamentary accountability and the accountability of Ministers, particularly in the light of Ministers' statements about their treatment by the BBC, which we now believe has more power than we in Parliament have? Many of us are deeply concerned that the questions that we ask of Ministers are not being answered and that there has been a clear deterioration in the standard of replies, certainly over the 15 years that I have been a Member of Parliament. I believe that a huge accountability crisis is developing, and the only means of solving it rests in the hands of the Government.

Mr. Newton: From my dealings in these matters—and I have had a fair number of questions from the hon. Gentleman, as have many other Ministers in recent weeks—I have certainly not participated in any design to reduce the quality or the extent of information given in response to proper and reasonable questions. I note the hon. Gentleman's concern and will reflect on it as may be appropriate, but I would make the point that in recent years there has been a huge increase in the volume of questions which has itself imposed certain strains on the administrative machine.

Mr. Peter Griffiths: Will my right hon. Friend offer any encouragement to those of us who believe that it is probably time for a debate and legislation on the matter dealt with by the Latham report, which has wide support within the industry and cross-party support in the Chamber?

Mr. Newton: I noticed some weeks ago that Building magazine made some friendly references to some sympathetic remarks that I had made in that respect and interpreted me as undertaking to advance the prospects of the legislation. That may have gone a little beyond what I said, but I certainly listened sympathetically to my hon. Friend's representation.

Mr. Ken Purchase: While the Leader of the House is considering next week's business, will he bear it in mind that on the day when thousands of health workers are campaigning against the Government's policy, particularly towards their pay, the Financial Times and Today newspapers have released details that the package available to Sir Duncan Nichol when he left the health service last year was approaching £200,000—equivalent to the salaries of 20 nurses for a whole year? Will the Leader of the House arrange for a debate on this important matter?

Mr. Newton: I have already said that my right hon. Friend the Health Secretary is due to answer questions on Tuesday 18 April. The hon. Gentleman might care to raise the matter with her.

Mr. Andrew Rowe: My right hon. Friend may be unaware that in a Committee Room in another place, an organisation called the Maranatha Fellowship


launched a booklet called, "What on Earth are We Doing to our Children?". It is a serious and moderate catalogue of the most appalling degradation and shame which is afflicting children in Britain and throughout the world. It convinced many of the people in that room that Parliament, as the centre of the country's legislature, is failing in its duty to children world wide. Will he provide time for a debate on the matter?

Mr. Newton: I made some reference to that at business questions last week or the week before, referring to proceedings in an another place. I cannot add to that, but I certainly acknowledge on behalf of the Government the seriousness of the problem and the importance of taking proper and practical steps to help deal with it.

Mr. Stephen Timms: Can the Leader of the House offer us an early debate on the regulation of the water industry, given the revelations this week that the water companies have negotiated with their regulator a high level of investment, but are actually committing a lower level of investment, the difference being used effectively to prop up their share prices in the meantime? I imagine that all right hon. and Members within the Thames Water area will have received the same letter as I received from the chairman of Thames Water about the programme for the next five years and confirming that that was their intention. It said:
When the work is completed … we will decide and make public how we intend to pass any savings on to customers and shareholders.
Does that not expose a massive hole in the current regulatory framework for the water industry, and may we urgently debate the issues that it raises?

Mr. Newton: I shall look with care at the hon. Gentleman's comments, but the industry's spending plans in respect of infrastructure renewal investment have been in the public domain since privatisation. I remind him that the water industry has been investing some £3 billion a year since privatisation, compared with the Government who he would have supported had he been here at the time, who cut capital spending on sewage treatment by some 45 per cent.

Mrs. Cheryl Gillan: Will my right hon. Friend find time for a debate on law and order, with an emphasis on the security of our towns and their streets and car parks? That would give me—and the Members who represent the 110 other areas into which the Government have put money for those grants—an opportunity to thank him first hand for the £23,000 grant that was given towards the closed circuit television camera system in Chesham. It would also give us an opportunity to point out that our actions speak louder than words and that it is the Conservative Government who are tough on crime and tough on the causes of crime, not the Labour party.

Mr. Newton: I endorse the my hon. Friend's latter remarks and express the thanks, I am sure, of my right hon. and learned Friend the Home Secretary for what she

said about the money for CCTV in many towns and cities. It is indeed an extremely good scheme and deserves more attention than it has yet had.

Mr. Dafydd Wigley: The Leader of the House will be aware of the worsening NHS dental crisis in many areas and of the fact that the Government have been considering their response for many months now to the consultations that they have had on the matter. Can he find time for a statement to be made in the House before Easter, because of the worries that it is causing to so many people?

Mr. Newton: I know that my right hon. Friend the Secretary of State for Health is actively considering that matter at the moment. I cannot make a commitment this afternoon that the matter will be brought to a conclusion before the Easter recess, but I will pass on the hon. Gentleman's hopes in that respect.

Mr. Barry Porter: We do not appear to have heard too much about Hong Kong recently. I would have hoped that we would have been given a full update, preferably by a debate, but if not certainly by a statement as soon as possible.

Mr. Newton: I am considering the possibilities of having such a debate. Whether it will be possible in the second half of the month after the Easter recess, I cannot yet be sure, but I am considering it carefully.

Mr. Dennis Skinner: Why cannot we have a statement next week about the plight of nurses' pay? Members of Parliament from Scotland, England and Wales all get the same pay and the same increase on the same day. If it can apply to Members of Parliament, why cannot nurses get a flat rate increase in line with inflation without having to scramble for it?

Mr. Newton: The short answer to that is the one that has already been given several times during Prime Minister's questions by my right hon. Friend: the move to local pay was set out in the nurses and midwives' own independent pay review body and the Government accepted its recommendations in full. As I understand it, the position of the Opposition must now be either that they would end the review body or that they would refuse to accept its recommendations.

Mr. Bill Walker: Will my right hon. Friend find time at an early opportunity for the House to debate early-day motion 533, which is about the cadet forces, and air cadets in particular and the good work that is done in the inner cities in the development of young people? Could it be combined with the long-overdue debate on the Royal Air Force?
[That this House congratulates the Government on its policy of supporting the Air Cadets and the cadet organisations of the Army and Royal Navy; notes that in these difficult times where there is a worldwide problem with youth, drugs and crime, that the volunteer officers and civilian instructors of the cadet forces by leadership and example coupled with demanding and challenging training programmes contribute massively towards the personal discipline and development of the nation's young people; and further notes how vital and important this task is in inner city areas.]

Mr. Newton: I will of course look for an opportunity to provide time for the debate on the Royal Air Force,


when that is practicable. It would provide an opportunity to make the important points that my hon. Friend has made. I pay tribute to the air cadets, who give young people an opportunity to take part in many pursuits that help to develop, among other things, good citizenship. Indeed, I have an excellent air cadet force in my constituency with which I have a number of connections. The good work is not confined to cities.

Mrs. Helen Jackson: If the Leader of the House has received his water bill for next year, he will be aware that, for 93 per cent. of domestic householders, the price increase next year will be above the price review cap that was imposed by the regulator less than 10 months ago. It is becoming clearer by the day that the price and charging regulation in that industry is totally discredited from both the industry and the consumer's point of view. Will he find time for a debate either before or after Easter on the issue of the regulation of the water and waste water industry?

Mr. Newton: I understand that charges for "measured" customers are rising by less than prices generally, owing to a reduction in standing charges, and that as a result of rebalanced tariffs, bills for metered customers are much fairer than they were, giving a proper incentive to customers who want to economise on water. It is manifest from what the hon. Lady said that she does not like that, but she might at least have acknowledged that it is a factor.

Mr. Bernard Jenkin: Will my right hon. Friend join me in congratulating my right hon. Friends the Prime Minister and the Foreign Secretary on the success of yesterday's "Britain in the World" conference? Does he agree that it is time that we debated the questions raised by the Prime Minister? In particular, would that not give us an opportunity to allay some of the false fears raised by Britain's not joining a single European currency? The deputy chairman of Nikko Europe plc, for instance, said that many Japanese investors would prefer us not to join a single currency, so that we can remain flexible and competitive.

Mr. Newton: Of course I shall give careful consideration to the latter part of my hon. Friend's question, and draw it to the attention of my right hon. Friend the Prime Minister. I am more than happy to join my hon. Friend—who is my near neighbour in Essex—in congratulating my right hon. Friends the Prime Minister and the Foreign Secretary.

Mr. David Winnick: Will the Leader of the House give further consideration to the strong Opposition view that before the House rises for the Easter recess a statement should be made about nurses' pay? As one who has experienced the dedicated work of nurses at first hand, I consider it shameful that the Government are treating them in such a way. That is one of the reasons for the widespread support for nurses: people are aware of the stressful work that they undertake with such dedication. Nurses certainly should not be treated as the Government are treating them.

Mr. Newton: Notwithstanding the latter part of the hon. Gentleman's question, all hon. Members on both sides of the House—even those of us who are sometimes the subject of rather aggressive remarks from him—will

wish to welcome him back to the House following the treatment to which he has referred, which has manifestly not reduced his vigour.
As for the rest of what the hon. Gentleman said, I do not think it reasonable to describe as shameful—or anything remotely approaching that—circumstances in which an independent review body has been established, and has made recommendations that have been fully accepted.

Mr. Jacques Arnold: Next week or during the week of our return, may we have yet another debate on education? I found yesterday's debate very illuminating: British people watching it could observe not only the progress that has been made in schools throughout the country as a result of Conservative policy, but the vacuum—punctuated by occasional cries of "me too"—that passes for Labour policy. The 60,000 children in Kent who attend grant-maintained schools, and their parents, would like to know what Labour's policy is on those excellent schools.

Mr. Newton: I understand that yesterday's debate provided considerable illumination of what was happening in a number of places, but none whatever of Labour's policy on the matters to which my hon. Friend has referred. He will keep at it; I will keep at it; we will keep at it; but I have little expectation that the clarification that he wants will be forthcoming.

Mr. John Hutton: The Monopolies and Mergers Commission's important report on the proposed acquisition of Vickers Shipbuilding and Engineering Ltd. by British Aerospace or GEC is due to be published during the Easter recess. Given the report's importance not only to the future of jobs in my constituency but to the future size and shape of the defence industry as a whole, will the Leader of the House make a commitment today to ensure that a Minister makes a statement to the House in the week following the recess so that the matter can be debated fully?

Mr. Newton: The appropriate time at which to consider how to deal with such a report is when it is delivered to my right hon. Friend the President of the Board of Trade, which I understand has not yet happened. Of course I shall draw those representations to my right hon. Friend's attention; but, as it happens, he is answering questions next Wednesday, when the hon. Gentleman may have a chance to put them to him directly.

Mr. David Wilshire: Will my right hon. Friend use his good offices to encourage my right hon. Friend the Secretary of State for Transport to make a statement before the Easter recess on the Government's proposals to enlarge the M25? The Leader of the House will no doubt be aware of the speculation in the newspapers that a Cabinet committee has taken a decision. As most of the road affected is in my constituency, I am sure that he will understand why I want the full facts in the public domain as quickly as possible.

Mr. Newton: My hon. Friend may understand why I should not join in that speculation, not least because I am a member of the committee to which reference has apparently been made. I am sure that, should he have anything to announce on the matter, my right hon. Friend


the Secretary of State for Transport will seek to do so as quickly as possible and with due regard to the House's wishes.

Mr. George Stevenson: Will the Leader of the House arrange for a statement on the Government's failure to generate the feel-good factor? Following the announcement by Northern Foods that it will close a factory in my constituency, with the loss of 320 jobs, will he arrange for the President of the Board of Trade to come the House next week and explain to my constituents why they should feel good about losing their jobs as a direct result of Government policy?

Mr. Newton: Changes take place in many industries. I would feel happier about giving the hon. Gentleman a more positive response were he to pay tribute to the efforts of my right hon. Friend the President of the Board of Trade and of many other Ministers, which, in recent years, have resulted in a steady flow to the country, not least to its northern part, of massive new investments in industry.

Lady Olga Maitland: Will my right hon. Friend consider arranging for a debate on local government spending? Has he read a report in today's Daily Express drawing attention to Labour-controlled York district council, which invited an army of graffiti artists into its town centre and equipped them with aerosol cans at a cost of £1,000? The graffiti artists went out of control and the police had to be called in. Council tax payers now face a £40,000 bill to clear up the mess. Does my right hon. Friend agree that, if that is an example of the new Labour party, we should stick with the Conservatives?

Mr. Newton: I have not seen that story, but my hon. Friend's account is of something that appears quite astonishing. I hope that it will be considered not only by the local authority, but perhaps, if appropriate, by the district auditor.

Rev. Martin Smyth: May I press the Leader of the House on the question from the hon. Member for Bolsover (Mr. Skinner), who apparently implied that Northern Ireland Members may be receiving the same pay in here, but who left Northern Ireland nurses out of his question? If the Government accept the 3 per cent. increase, will an inquest be held into trusts that do not provide the extra 2 per cent. that the Government have been recommending, bearing in mind the fact that the pay of trust managers has increased significantly and that the nurses do the work?

Mr. Newton: The hon. Gentleman's question, which I am sure was put with the best will in the world, implies some misunderstanding. The review body report contained the proposal for the move to local pay. I understand that a survey published only today by the National Association of Health Authorities and Trusts shows that the majority of trusts that have made their intentions known are offering nursing staff a pay rise of about 3 per cent.

Mr. David Nicholson: My right hon. Friend has been successful in arranging debates on the planning system, notably the recent debate on the Select Committee

on the Environment report on out-of-town shopping. Will he consider arranging a further debate on a specific subject—population experts' rather debatable assumptions about demographic growth and new housing need in the south and south-west? Those assumptions are causing great concern not only in Somerset, where 50,000 new houses are threatened in the next decade or so, but in many other constituencies where people do not want to see more slabs of the countryside concreted over?

Mr. Newton: I am sure that those views are widely shared, but, whatever dispute there may be about the statistics, there are pressures from increased population in some cases and from an increased number of families, due to various causes, in others. I cannot promise a debate, but my hon. Friend has already informally indicated to me—I hope that he will not mind my saying so—that he intends to engage in his usual practice of taking part in next Wednesday morning's debate. Should he catch your eye, Madam Speaker, and be able to do so, I will try to make sure that I have the briefing to give him an answer.

Mr. Tam Dalyell: Twenty minutes ago, the Leader of the House complained to my hon. Friend the Member for Workington (Mr. Campbell-Savours) about the strain of questions. I confess that 155 of them are mine. They are all on the same subject—Lockerbie. As the Leader of the House knows, during Monday's business he has an ideal opportunity to announce the establishment of a Select Committee. If he cannot do that, could he go for a walk at the weekend in the Essex sunshine, in some beautiful spot in his county, and contemplate the conundrum of how on earth the Lord Advocate and the Crown Office are going to be made responsible to Parliament?

Mr. Newton: I did not intend any remarks that I made to the hon. Member for Workington (Mr. Campbell-Savours) to be particularly a complaint, merely an observation that there has been a huge increase in the number of parliamentary questions, which has created difficulties for the House authorities as well, as you are aware, Madam Speaker. It was certainly not intended as a compliant, let alone a criticism of the hon. Member for Linlithgow (Mr. Dalyell).
I have no doubt that every effort will be made to answer the hon. Gentleman's questions as best may be. He has already had an Adjournment debate, which was replied to by my right hon. Friend the Foreign Secretary himself. I have written to the hon. Member for Linlithgow further following my reflection on his earlier remarks. I hope that he does not intend to imply any discourtesy. There is nothing much that I can add to that from the Dispatch Box this afternoon.

Mr. Geoffrey Clifton-Brown: Will my right hon. Friend find time next week for a debate on planning so that I can convey to my right hon. Friend the Secretary of State for the Environment the extreme frustration of the traders of Tewkesbury? They delivered a coffin to the Department of the Environment this afternoon to demonstrate that their town centre will die if he grants planning permission for a huge factory outlet outside the town.

Mr. Newton: My hon. Friend will understand that, in the circumstances, I can only draw those representations to the attention of my right hon. Friend the Secretary of


State for the Environment. My hon. Friend will know that those matters have been the subject of general debate on an estimates day in the past few weeks.

Mr. Edward O'Hara: Will the Leader of the House prevail upon the Minister of Agriculture, Fisheries and Food to make a statement to the House on the proposed introduction of the Meat Hygiene Service? I know that he deposited a statement in the Library yesterday arising out of what he called a "Final Industry Forum" on Monday this week. Since then, there has been a mass revolt among the members of the Federation of Fresh Meat Wholesalers who say that they were not properly represented at that forum. To date, 160 out of 400 have expressed their dissent and by the end of this week I expect dissenters to be in a majority. There really is a crisis in the fresh meat industry and the Minister should come to the House to answer questions on that matter.

Mr. Newton: The hon. Gentleman will no doubt be aware that some of the relevant regulations have been prayed against and arrangements have been made for a debate in Standing Committee.

Mr. Harry Greenway: May we have a debate next week on polling, in particular so that we can evaluate the MORI poll in The Times last Friday which reported that research had shown that 62 per cent. of electors believe that any Labour Government would increase taxation drastically and that they further believe that the Labour party in national or local government always raises taxes, despite all the huffing and puffing that we heard in recent months?

Mr. Newton: As it happens, the business that I announced for next week includes two days on the Finance Bill, which would appear to provide some opportunity for my hon. Friend to make those important points.

Mr. Max Madden: May I draw the attention of the Leader of the House to early-day motion 928?
[That this House congratulates Linda McKenzie and Julie Rawnsley of the Allerton Outreach Team on their remarkable success in obtaining jobs for local people and in assessing their training needs; notes that since 6th February the team has placed 51 of the area's 500 unemployed people into paid work and 25 into training; further notes every unemployed person now costs the state £9,000 a year on average in benefits and lost tax payments; is dismayed that the Allerton Outreach Team, which has brought jobs and hope to a most deprived local community now embarking upon a long-term regeneration scheme, will be forced to close within weeks unless modest permanent funding is arranged; and urges the Secretary of State for the Environment to take the necessary action to safeguard the most important work being undertaken by the Allerton Outreach Team.] 
Will he arrange a debate on unemployment, which would allow me to urge Ministers to visit the Allerton Outreach team in my constituency and discuss with Linda McKenzie how she has been so successful in getting more than 50 people into full-time paid work in only seven weeks and another 25 into full-time training? It would be very helpful for Ministers. It would—one hopes—enable them to do the same for many other people throughout

the country and to abandon their grudging and piecemeal policy towards funding that very important and successful project.

Mr. Newton: I have two points. I am not sure that the Opposition Front-Bench team would welcome a debate on unemployment since the one thing that they appear to wish never to mention is the considerable and continuing fall in unemployment in this country. On the specific point relating to the Allerton Outreach team, I am pleased that Bradford training and enterprise council has agreed to part fund a continuation of the work on the estate next year. It is now, as I understand it, for Bradford council to consider meeting any shortfall. Perhaps the hon. Gentleman may care to make his representations in that direction.

Mr. Nigel Evans: Will my right hon. Friend find time next week for a discussion of devolution along the lines suggested by the Labour party? No doubt devolution would mean extra costs for all taxpayers. What really concerns me is that the dedicated group of nurses, about which we have heard so much today, as well as teachers, policemen and others, would have to pay 3p in the pound more tax just because they lived in Scotland than would members of that dedicated group of workers who lived south of the border.

Mrs. Ann Taylor: Yes, let's have a debate.

Mr. Newton: The hon. Member for Dewsbury (Mrs. Taylor) is also urging that we have a debate. I am increasingly tempted to arrange a debate, or possibly even to offer an Opposition day, provided that the hon. Lady undertakes to make it a day in which we are told the details of Opposition policy on devolution and regional government, education and taxation. I bet that she will not want it.

Mr. Bill Olner: The Leader of the House may be aware of the recent legal opinion sought by the Royal Society for the Prevention of Cruelty to Animals and the International Fund for Animal Welfare on the transportation of veal calves. It seems that with the new legal advice it is quite possible for the Government to ban that barbaric trade from this country to other parts of Europe. Will he ask the Minister of Agriculture, Fisheries and Food to make a statement so that this matter may be cleared up quickly?

Mr. Newton: My right hon. Friend is studying carefully the legal document issued by the RSPCA, to which the hon. Gentleman has just referred, which argues along the lines that he has described. Of course it needs to be considered alongside the other legal advice which my right hon. Friend has received.

Mr. James Clappison: Following on from my right hon. Friend's comments about the unwillingness of the Opposition to debate economic policy, is he aware that out of 12 Opposition day debates so far this year, not one has related to the management of the economy? Will my right hon. Friend give the Opposition Front-Bench team an opportunity to overcome that shyness and explain how they would control public expenditure, deal with taxation and achieve high levels of growth, falling unemployment and low inflation? May I warn him,


however, that in view of the feeble performance by the Opposition Front-Bench team in Treasury questions today, such a debate would not take very long?

Mr. Newton: I will of course look for such an opportunity in response to my hon. Friend's blandishments. I must make the observation, however, that providing an opportunity and ensuring that it is taken are two very different things.

Mr. Paddy Tipping: Will an early opportunity be provided to discuss a promise made five years ago by the then Home Secretary that the imprisonment of unconvicted 15 and 16-year-olds would be discontinued? It is essential to have that debate now, as three years ago 57 youngsters were in custody and today 220 are in custody. What has happened to that promise?

Mr. Newton: While I cannot promise a debate, I can certainly bring the matter to the attention of my right hon. and learned Friend the Home Secretary. The hon. Gentleman may care to bear in mind the fact that my right hon. and learned Friend is due to answer questions on Thursday 20 April.

Mr. John Heppell: Is the Leader of the House aware that yesterday, while announcing plans for a private prison in Nottinghamshire, the Home Secretary bragged and boasted that there were no longer any cases of three prisoners to a cell? Is he also aware that, on the same day, instructions were sent out from area managers to prison governors which effectively told them not only to return to putting three people in a cell, but that there was a need to put prisoners in television and recreation rooms and in workshops? Will the Leader of the House find time next week for a debate about the developing crisis in Her Majesty's prisons?

Mr. Newton: It is certainly Government policy to ensure that the prison service has the resources to provide accommodation for those whom the courts send to prison. That is why there has been a substantial increase in the number of places provided. However, I shall draw the hon. Gentleman's remarks to the attention of my right hon. and learned Friend.

Mr. John Gunnell: Will it fall to the Leader of the House, in his own right, to make a statement on conflict of interests? As the right hon. Gentleman is aware, at present the issue is the role of defence procurement Ministers. Would it be helpful if we had a clear statement of principles so that when the facts of a matter were not in dispute, the necessary action would follow?

Mr. Newton: I am not entirely clear precisely what the hon. Gentleman is referring to—unless this is a further attempt to raise questions about my right hon. Friend the Chief Secretary to the Treasury. However, the rules concerning people holding ministerial office at the time are all clearly set out in "Questions of Procedure for Ministers", which under the present Government is published and available for the first time.

Mr. Mike O'Brien: May we have an urgent debate on Customs and Excise, which is part of the Treasury, so that we can be reassured that

Ministers will encourage that service to investigate every suspect, without fear or favour, even if the suspect has been a Treasury Minister?

Mr. Newton: Clearly that is another attempt to reopen the same subject. If the hon. Gentleman has any evidence to suggest that those matters have not been properly investigated he should make it available and not make allegations by innuendo across the Floor of the House.

Mr. Jeremy Corbyn: Will the Leader of the House make time available for a serious debate on the invasion of northern Iraq by Turkey, and the danger of an explosion in that whole area, with attacks on the Kurdish people not only by Iraq but by Turkey, and attacks by Iran on the Kurdish people within its frontiers? Such a serious debate would cover Britain's military involvement in the area through supplying intelligence information to the Turkish armed forces, and British arms sales to Turkey, Iran and Iraq in the past?

Mr. Newton: The right course is for me to bring those questions to the attention of my right hon. Friend the Foreign Secretary.

Mr. Tony Banks: Has the Leader of the House seen the report in The Guardian today, headlined:
Mandarins censor damning report on County Hall sale"?
It would appear that the National Audit Office report is being censored by the Department of the Environment under its Permanent Secretary, Andrew Turnbull, who wants to take out the parts that show clearly that civil servants did not give Ministers the full evidence about the competing bids by the Shirayama hotel group and the London School of Economics. When the report is published next week, will the right hon. Gentleman arrange for a statement to be made in the House so that we can find out whether civil servants stitched up Ministers or whether Ministers stitched us up?

Mr. Newton: I understand that the report will be published next week, which means that it would be wrong for me to join in speculation about what it may say—even if, indeed, I were yet aware of its contents. However, talk of censorship is absolute nonsense. It is established procedure for NAO reports to be discussed and agreed with departmental officials. It is important to ensure that there is an accurate account of the facts for the Public Accounts Committee, and that is really what we are talking about.

Mr. Paul Flynn: Now that European Commissioner Neil Kinnock has announced that there is no European obstacle to banning the use of bull bars on vehicles, a safety measure desired by Members on both sides of the House, and now that it has been made clear by traffic laboratories all over Europe that bull bars cause 35 extra fatalities every year, and 350 additional serious accidents in this country, should we not debate that matter now to make sure that the accidents that are otherwise certain to take place will not happen? The Transport Research Laboratory has told us that if a child is hit by a vehicle with bull bars, even if it is travelling at only 12 mph, that child will almost certainly die.

Mr. Newton: Perhaps the most appropriate course for me in the circumstances is to make to the hon. Gentleman


the point that I have made earlier to others, which is that my right hon. Friend the Secretary of State for Transport is due to answer questions on Monday.

Mr. Harry Barnes: Instead of disappearing for another fortnight, should the House not use part of that time to deal with the Civil Rights (Disabled Persons) Bill? It could do so in a Committee of the whole House so that the Bill would no longer be blocked in the Committee queue. The remaining stages could then be dealt with. There is still a considerable distance between the Disability Discrimination Bill, which has been through the House, and the Civil Rights (Disabled Persons) Bill, which is so widely supported in the House and outside, by organisations including the British Medical Association.

Mr. Newton: As I have told the hon. Gentleman on at least three or four occasions in recent weeks and I have to repeat today. I have no plans to change the normal arrangements for dealing with private Member's Bills. As for the rest, I simply note with pleasure that the Disability Discrimination Bill completed its Report stage and received its Third Reading in the House two nights ago. That is good news for disabled people. I congratulate my hon. Friend the Minister for Social Security and Disabled People.

Mr. Rhodri Morgan: I am sure that the Leader of the House will have seen the reports that Tenovus, one of the best-known cancer research charities, which has its headquarters in Cardiff, has had to close its scratch card operations, which brought in half its £3 million annual income, which all went to fund its three cancer research centres? It has done so because of the competition from the national lottery scratch card game with top prizes ten times greater than the charity is able to offer. Does he agree that the national lottery's all-embracing expansion is getting to the stage at which it is almost like a Spanish trawler taking the whoppers and the tiddlers alike. Does he agree that we should consider the side-effects of the expansion of the national lottery in a debate on its effects on medical research and cancer research in particular?

Mr. Newton: I should make several points, albeit briefly. Obviously, I understand why the hon. Gentleman has raised the matter. Equally, everyone will share his regret at the decision of Tenovus to end its lottery. I understand that Camelot, the operators of the national lottery clearly say that there is no question that retailers were asked to stop selling tickets for other lotteries. The national lottery is raising large sums of money for many important purposes.

BILLS PRESENTED

PARLIAMENTARY ELECTIONS

Mr. Jeff Rooker, supported by Mr. Austin Mitchell, Dr. Tony Wright, Ms Glenda Jackson, Mrs. Anne Campbell, Mr. John Garrett, Mr. Frank Field, Mr. Keith Hill, Mr. Mike Watson, Mr. Giles Radice, Mr. Hugh Bayley and Mr. Graham Allen presented a Bill to amend the law relating to elections and political parties: And the same was read the First time; and ordered to be read a Second time upon Friday 28 April, and to be printed. [Bill 93.]

Point of Order

Mr. Geoffrey Clifton-Brown: On a point of order, Madam Speaker. You will recall that yesterday the hon. Member for Sheffield, Brightside (Mr. Blunkett) made a statement and that when you subsequently examined Hansard you made a ruling that he should withdraw that statement. In the "Yesterday in Parliament" programme this morning, the BBC broadcast his statement. Although it said that he subsequently apologised, it did not broadcast your ruling or the retraction. Will you consider contacting the BBC to say that if it is to broadcast the proceedings of the House it should make an accurate and unbiased broadcast and that it should have broadcast also your ruling and the subsequent retraction?

Madam Speaker: I normally hear the radio in the morning, but this morning I was busy on other things. I am pleased that the hon. Gentleman has brought it to my attention. May I see what I can do about that matter? If I have given a ruling on such an issue, it ought to be properly reported by whatever media are interested in making such a report. Thank you.

Contracting Out

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Jonathan Evans): I beg to move,
That the draft Contracting Out (Functions in relation to the Registration of Companies) Order 1995, which was laid before this House on 6th March, be approved.
The order is made under section 77(2) of the Deregulation and Contracting Out Act 1994. It is the first use of this important power, which enables certain statutory functions to be discharged by contractors where at present they may be discharged only by public servants. That power was introduced as part of the Government's drive to ensure improvements in the quality and efficient delivery of public services. The Government's "competing for quality" programme has produced a sea change in the way in which such services are delivered, and has ensured two important matters—better value for money for the taxpayer, and higher standards for customers.
Companies House has been a part of that success story. Since it became a "next steps" agency in 1988, and achieved trading fund status in 1991, it has shown continuing improvements. However, it is worth making the point that the decision to move to agency status in 1988 was not without its critics. Not the least of those was Ron Webster, the chairman of the civil service unions at Companies House, who claimed that the real purpose of agency status was to fragment the service and to expose it to privatisation.
Interestingly, the move to trading fund status has also been recognised latterly as a success, although it is of some interest that, when the matter came to be debated in Committee, the Labour members of that Committee—the hon. Members for Workington (Mr. Campbell-Savours) and for Redcar (Ms Mowlam)—opposed that proposal.
It is worth underlining the fact that, since agency status and trading fund status were granted, improvements have taken place. In 1992, Companies House received its charter mark for excellence in the provision of public services. In 1988, it took 30 days for a document to be processed and made available to the public. It now takes less than five days.

Mr. Dafydd Wigley: Does the Minister accept that, in the case of Companies House, one must be careful on any question of privatisation, because much of the information held there is extremely commercially sensitive, and the way that that is handled must be seen and felt by all concerned to be beyond reproach?

Mr. Evans: The issues turn not upon privatisation but upon contracting out certain services. The hon. Gentleman is wrong in terms of the function of Companies House, which exists not to keep information confidential but to disseminate information about directors of companies and about annual reports. The line that the hon. Gentleman has taken is some way wide of the mark.
I was speaking about the improvements that have been brought about as a result of changes which the Government have introduced, in the face of some opposition. The proportion of companies which meet their

annual filing obligation has risen from 80 per cent. in 1988 to more than 90 per cent. this year. I consider that a significant achievement.
Companies House is now deservedly held in high regard by its users, but that was not always so. I happily pay tribute to the management and staff of the agency for the improvements they have achieved. However, like every organisation, Companies House must strive for continual improvement. The timely incorporation and dissolution of companies, the proper keeping of company records, and the pursuit, compliance and speedy and accurate dissemination of information are all essentials of our commercial system.
Hon. Members will be aware that it is our standard practice in Government to review the status of each agency periodically. The review of Companies House was undertaken to see how best we could build upon that record. The Government's decision following the review was announced by my right hon. Friend the President of the Board of Trade on 20 December. We concluded that the best way of achieving further improvements is through closer involvement of the private sector in the running of Companies House.

Mr. Roy Hughes: Have the Minister and his colleagues considered the bad effect of these changes on staff morale? I should have thought that that would be highly detrimental to the whole operation.

Mr. Evans: Since my appointment, I have had the opportunity of meeting the unions at Companies House—certainly before 20 December, when the President of the Board of Trade made the announcement. At that time, there was substantial concern about the prospect of "full contractorisation", as it was described, but the announcement, which is reflected in this order, does not go down that route at this time. In those circumstances, it is important to draw a distinction between the fears that have been whipped up and the proposals that are before the House today.
The business information industry is in the early stages of a major technological change, as microfiche is replaced by digital technology. We plan, therefore, to proceed on a progressive basis. Companies House will remain an executive agency and will work in partnership with the private sector to develop new technologies. At the same time, it will work through a programme of contracting out a number of areas, putting each out to tender to private providers. I envisage that about 270 jobs out of a total of 950 will have been transferred to the private sector by 1996. Just over 100 of those will be in Cardiff, and the rest will be mainly in London and Edinburgh.
The programme involves a number of statutory functions, which is why this order is necessary. They are presently carried out at Companies House in London, the satellite offices in Leeds, Birmingham and Manchester, Companies House in Edinburgh and, in the case of postal search, at Companies House in Cardiff.
In London and the satellite offices, the statutory functions are to provide facilities for inspecting company records and to receive documents for filing. The offices also undertake same-day incorporation and changes in company names. The Edinburgh office carries out the full range of Companies House functions in Scotland, including the recording and retention of company information. The fact that strategic decisions, including


technical change, will continue to be managed from Cardiff makes it feasible to include the Edinburgh office in the programme at this time.
The order sets out the statutory functions that the contractor may be employed to carry out, but it is by no means the whole story. In the first place, under section 72 of the Deregulation and Contracting Out Act 1994, in all cases where statutory functions are contracted out, the registrar or the Secretary of State, as the case may be, remains legally responsible for anything that is done, or not done, in connection with that function.
I emphasise that contractorisation is a process of testing. Potential bidders will be required to demonstrate that they can offer and deliver better value for money than would be achieved if the activity were not contracted out. By value for money, I do not mean merely a lower price—it is essential that the contractor maintains, and where possible improves upon, present levels of service. Unless that can be demonstrated, contracting out will not go ahead.
Our intention is to make rapid progress with the programme and to have it completed by 1996. We expect to issue an information memorandum and to invite expressions of interest in respect of the contract for London and the satellite offices soon after the making of the order, with an invitation to tender following before the summer. Details of the contract for postal search and Edinburgh will follow later.
The information memorandum for the other non-statutory activities in Cardiff will be published during the spring and summer, and those activities include building management and cheque processing.
We believe that the contracting-out programme offers the best way of building on the excellent record of Companies House. The agency plays a crucial role in this country's commercial system. Our aim is to ensure that it operates as efficiently as possible and that, as taxpayers and users, we get the best value for money. I commend the order to the House.

Mr. Stuart Bell: I am grateful to the Minister for taking us through the order so quickly and promptly, and for making a number of points with which we would concur to some extent, and others that we want to consider.
The Minister mentioned the agency, trading status and the reduction from 30 days to five in the time necessary for processing a document. We would all accept that things have changed at Companies House during the past 10 years. Essentially, the industry was labour-intensive, and it has been harnessed to the information technology age. In 10 years, things have changed considerably, which has brought us to the present situation.
My hon. Friend the Member for Newport, East (Mr. Hughes) mentioned the specific matter of the morale of those who work in Companies House, and I shall deal with that in my structured and prepared speech. I remember a phrase by Pierre Mendès-France many years ago: that we cannot treat people as tools; they must be treated as individuals. In our debates in the House, we sometimes get carried away and forget that, ultimately, we are dealing with people. My hon. Friend the Member for Newport, East made that clear.
I was struck by the Minister's definition of the order. We have heard much during the past 15 years about privatisation. We have debated the question of partial or public privatisation, and we now have privatisation defined as "a closer involvement of the private sector in the running of Companies House". We are not entirely clear what that means. It turns out not to be full contractorisation at this time, although we might get there eventually by 1996. We might not get there, because, if the testing process does not work, we shall not have better value for money, and therefore privatisation will not go ahead.
Does that smack of firm government, decisiveness and belief in the projects of partial privatisation and contractorisation? Again, the Government are dithering. Their uncertainty will, however, satisfy Conservative Back Benchers. I often have to come to the House late on a Thursday night and make a great speech with the serried ranks behind me. Tonight, they are not as serried as they should be—indeed, they are fewer than normal.
But so little is Conservative Members' interest in privatisation and so exhausted have they become as a result of their 16 years in office that not a single member of the Government, who will soon be the Opposition, has bothered to come to discuss a matter that concerns Cardiff, Edinburgh—I hope that my hon. Friend the Member for Midlothian (Mr. Clarke) will catch your eye, Mr. Deputy Speaker—and London.

Mr. Rhodri Morgan: Perhaps they have already been privatised.

Mr. Bell: Some of us may say that they have been vaporised rather than privatised.
The Minister told us that 270 jobs will be transferred from the public sector to the private sector, 100 of which will be in Cardiff. At the outset of what I called my "structured speech", I thank the Minister for being courteous enough to meet my hon. Friends and me to discuss this privatisation. He took us through the arguments, and said that he would consider the points that we made.
However, we know, as he knows, that he is not responsible for tonight's order, as it is the result of a long review. The review of the future of Companies House shows how the Government have unravelled themselves over the months and years, because their approach was never firm, set or determined. The review has been on-going since October 1992, the second phase was launched in May 1993, and the current phase started in July 1994.
A remarkable feature of the review is that our dynamic President of the Board of Trade dithered over the future of Companies House. Did he believe in privatisation or partial privatisation? Was he an optimist or a pessimist? Lord Healey told a story from this House which applies to the President of the Board of Trade. This dynamic man of action who goes on a pleasure cruise is trying to put up his deck chair. Is he facing the bow or the back of the boat? Is he an optimist or a pessimist? What does he believe in: full or partial privatisation? In the end, he cannot get the deck chair up.
So it is with the President of the Board of Trade—that mighty man, that great figure in the Conservative party. In his book "Where There's a Will", he vaunted how he had defended privatisation throughout the years of Labour


Government from 1974 to 1979, and how he fought tooth and nail to prevent nationalisation. He tells us how wonderful privatisation is, but what, ultimately, does he do? He comes to the House, through his Under-Secretary of State, and speaks of a contractorisation process that may or may not end in a successful contractorisation of Companies House by the year 1996.
We do know—and the Minister has confirmed it—that specific parts of the organisation have been selected for contractorisation, such as the whole of the Scottish companies registry, involving about 50 jobs. One may ask, with thousands of jobs lost here, 3,000 jobs lost there, jobs lost throughout the country with the aim of becoming competitive, why should we concern ourselves with 50 jobs in Scotland? In the London search room, about 50 jobs are involved. Why should we concern ourselves with the 150 jobs that will go from Companies House in Cardiff?
Where are the snows of yesteryear?
Francois Villon asked that question in the 15th century. Where are the major privatisations of the present Government? What has happened to the Government in 17 years, that their privatisation programme ends with the semi-contractorisation of Companies House?
The President of the Board of Trade wrote a chapter about privatisation in his fantasy novel, "Where There's a Will". It did not read as well as that of the Conservative Member who wrote a novel recently. I forget the name of her constituency, but she is well known to the House. [HON. MEMBERS: "Derbyshire, South".] "Where there's a Will" certainly does not compare with the novel of the hon. Member for Derbyshire, South (Mrs. Currie).
Nevertheless, in that novel, the President of the Board of Trade vaunted privatisation; he promulgated it; he sang its praises; and at the end of the day, he privatises the London search room of Companies House. Opposition Members believe that this is a fag-end order of a fag-end Government.
The President wrote in his book:
The Tory philosophy must build upon the individual".
We are entitled to ask, which individual supported the contractorisation of services in Companies House? Where does the desire come from? [Interruption.] We know that it does not come from Companies House staff, as my hon. Friend the Member for Cardiff, West (Mr. Morgan) says from a sedentary position, partially sotto voce and partly not. It does not come from the business community. The Institute of Credit Management, on behalf of its 8,000 members, made a strong representation to the management consultants who made their privatisation study. It wrote repeatedly to the President of the Board of Trade and to the predecessor of the Under-Secretary of State for Corporate Affairs.
The management consultants also canvassed the opinions of other organisations. They concluded that there was no significant user demand for privatisation of any type. So why have the Government proceeded? Why bother with a consultation exercise if the results are to be ignored and the Government are to ride roughshod over the wishes of the business community?
Opposition Members hear a great deal about how business is big; business is beautiful; it is all about capitalism; it is all about consumerism; it is all about

setting businesses free; but when the business community shows no interest whatever in privatisation, full, partial or contractorisation, of Companies House, nevertheless that is what we get.
I hoped to hear from the Minister, but did not hear, that that is part of a deregulation drive. If he had had a motive for his order tonight and it was deregulation, we might at least have tried to understand that and ask for an explanation.
We know from the Government that theirs is only a paper drive to deregulation. The Government have made so little impact in their so-called deregulation that few people in the business community believe it. If they are strangled by red tape, they know who put the red tape around their necks. If they are bogged down in paperwork, they know who gave them the paperwork. I was going to say in my prepared speech that it was no use hon. Members shaking their heads in dissent, but none of them is there to shake his head in dissent.
I attended a dinner at which the President of the Board of Trade made a speech. He said that the Government had cut 3,500 regulations, only to find that they were duplicate regulations. Nothing had changed. One can cut 3,500 regulations from the statute book and make no progress in deregulation.
When the previous Under-Secretary of State for Corporate Affairs, the hon. Member for Honiton, whom I had hoped would be here tonight because he took a strong interest in the subject, was in the post presently occupied by the Minister, he brought to a Committee of the House two bookloads of consolidated regulations, most of them—[Interruption.] Would the hon. Gentleman like to intervene?

Mr. Peter Luff: It was Tatton, not Honiton.

Mr. Bell: I had misunderstood the hon. Gentleman. I thought that he said "tacky" rather than "Tatton". That is why I wanted him to give way, but I am grateful to the hon. Gentleman.
The hon. Member for Tatton (Mr. Hamilton), had two books of consolidated regulations, which he brought to Committee and which he freely admitted had been placed on the statute book by a Conservative Government from 1979. In many respects, the Government pay lip service to regulation. They work the numbers game. They hope that no one will notice that, although they cut a series of regulations, many were duplicates. None of that penetrates the psyche of our ordinary business man and woman.
So it is with the order, as I said in response to my hon. Friend the Member for Newport, East. Is it privatisation? Can anyone tell us whether the order before the House is a privatising order? Is it a deregulation order? Is it designed to cut paperwork? Is it designed to help companies who send their reports regularly to Companies House? Is it to do with competition? Are the Government saying that there will now be competition in paperwork; that firms can compete to supply the services? They are not saying that either.
What is the order? Is it simply a weak, limp gesture of a Government who are falling in upon themselves with their incompetence, their uncertainties, their lack of will and their lack of belief in themselves?
To return to the argument of my hon. Friend the Member for Newport, East, the Government have done in that organisation what they have in so many others; they


have spread uncertainty in Companies House. They have spread insecurity, doubt and unease. That is hardly the way in which to instil a feel-good factor into an essentially skilled work force.

Mrs. Gwyneth Dunwoody: Surely one of the things that worries all of us is that, with a civil servant, who is held responsible by straightforward rules of conduct, the state has some protection for important aspects of information which are held at Companies House, and which affect every person in the country. If, for any reason, that procedure becomes not only privatised but open to all types of problems with confidentiality, frankly, many people will not have as much confidence in the system.

Mr. Bell: I am grateful to my hon. Friend for the two arguments she makes. First, the protection of the civil servant is lost, because the Government are trying to move civil servants from that profession into the private sector.
Secondly, my hon. Friend argues that there is confidentiality in the system. We suppose that, when the Minister puts contracts out to tender, replies will come from large firms such as Dun and Bradstreet, which will have to defend that confidentiality. We are not sure whether there will be a conflict of interest, let alone whether the confidentiality to which my hon. Friend referred will be protected.

Mr. Jonathan Evans: Simply for the sake of the record, will the hon. Gentleman tell us what confidential functions he has in mind?

Mr. Bell: Most people know that a great deal of information that is passed to Companies House is of a confidential nature. The Minister has read the briefings on the subject that others have read. Although we agree that we want a great deal of transparency in the system, nevertheless certain information is treated on a confidential basis. I should be glad, in the terms of a Minister of the Crown, to refer that to my civil service, and give a proper answer in writing when the time comes.
The Government long ago abandoned the unskilled workers in our free market economy. What they are now doing, up and down the country, is abandoning the skilled workers as well, such as those at Companies House. Those workers carry, if not the mark of Cain upon their brow, certainly in their pockets the mark of the short-term contract.
When the Government talk about a feel-good factor, they should realise that they will never achieve it while skilled workers up and down the country are on short-term contracts, with the insecurity that that breeds in them. I imagine that that sense of insecurity—which has now been instilled in Companies House, as it has throughout the rest of the country—will come back to haunt the Government the closer we come to an early general election.
I mentioned the search room at the London end of Companies House. Its future and fate have, rightly, long exercised my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith). He wrote a letter to the President of the Board of Trade on 21 December 1994,

after the announcement on the future of Companies House had been made in response to a written parliamentary question. He said:
It is not only the potential loss of job that matters, important though that issue is in an area of very high unemployment.
It is the loss of the first rate service which is provided at the moment by Companies House.
There is no guarantee that the level of service provided, especially to companies based in the City, will be maintained.
Indeed there is every likelihood that under contracting out, the drive will constantly be to provide a basic service and nothing else.
It would be useful if the Under-Secretary of State would tell the House that the services will not decline through contractorisation. It would be useful if he could tell the House now that he intends to keep the organisation as it is and where it is. It would be useful if he could tell the House now that it is not his intention to reduce the London office to a deposit-only facility. Those are genuine questions asked by a Member of Parliament on behalf of his constituents, and demanded by the Opposition to reassure those who will be contractorised.
Whatever the ideological and doctrinaire basis for privatisation, it can hardly be extended to Companies House. My hon. Friends and I, and those who are following the debate, know that it is an enforcing body. It has the power to fine defaulters and to operate discretionary powers on behalf of the Secretary of State. I believe that the Minister touched on that in his opening statement. When the contractorisation is completed, Companies House will always be more of an arm of Government than a private enterprise. As Companies House has a monopoly over the collection and supply of certain sorts of company information, it is appropriate that it should remain in the public sector.
The Government are trying to create another private monopoly—not on the same scale as British Gas or electricity or water. The Government are trying to create, between now and 1996, a private monopoly or series of private monopolies out of a public monopoly. I have some sympathy with the Minister, who has had to come to the House today with the order. He has climbed the giddy heights of ministerial office in a short time.
As Longfellow wrote:
The heights by great men reached and kept
Were not attained by sudden flight".
But the Minister has moved fast. However, having reached ministerial office, he must face the precipice of a defeat at the next general election.
When the Minister retires—I am not talking about his seat, but his post at the Dispatch Box—in the none too distant future, he may open his Red Box for the last time, put his hand on his heart and ask himself what he has done in his years in Parliament, and how he will be remembered as a Minister of the Crown. He may ask himself what he will say to the grandchild on his knee who wants to know what his grandfather did, not in the great war, but in the House of Commons, in Parliament and in a Tory Government. He will be able to say, truthfully and candidly "I contracted out the services of Companies House." What an epitaph that is.
It is by the small things in life that we know others. As the Bible states:
By their fruits ye shall know them".


But it is by the small things that the Government give themselves away. The order is the epitaph of a Government who have not so much lost their way, not so much misled the public, are not so much riddled with incompetency, as failed on their own privatisation front.
The Government of the day—a Conservative Government elected in 1979 on a privatisation programme reinforced in 1983—have come to the House with an order on Companies House that talks not of full privatisation or partial privatisation, but of contractorisation on a trial period. The Government have ended up privatising the search room of Companies House in City road, and the Scottish companies registry. What better epitaph could we want for such a Government?

Mr. Jon Owen Jones: I pay tribute to the efforts of the staff of Companies House, who, for 18 months and two years, have campaigned unceasingly against the threat to their jobs and to the services that they provide. It is not only the staff and the Opposition who have opposed the privatisation measures. Is it not true that the Government's own advisers told Ministers that contracting out would be expensive and was not wanted, and that there was concern about supplying documents to the private sector contractor?
Can the Minister quote one unequivocal argument from the SRU report in favour of contracting out? The taxpayer has spent £283,000 for the advice, yet it is to be ignored. Is that the value for money that the contracting-out process is supposed to bring?
The customers of the services provided by Companies House have been almost unanimous in their support for Companies House remaining in the public sector and against the creeping process of privatisation. The SRU report—the Government's own report—states:
There is concern … about supplying documents to a private sector contractor, rather than to civil servants. This audience values the civil service virtues of impartiality, reliability and public service … Overall, large users' attitudes to contractorisation were that the case for making this change was not obvious".
Perhaps even more damning was the comment:
the overwhelming majority of those to whom we have spoken, as of those who have written to us, have a very positive view of what Companies House now does: they regard Companies House as providing an essential service efficiently and at modest cost and incomparably better than it provided a few years ago".
If that is the view of the people who use the services of Companies House, what is the purpose of altering and tinkering with the excellent service with which the business community is happy?
The argument, if there is an argument, must be on a value-for-money claim—that somehow we can obtain better value for money. The Government claim that value for money will be the deciding factor—the Under-Secretary made that claim earlier today. But does the Minister not agree that contractorisation will increase costs, because of the extra monitoring that has to be done to ensure that contractors do what they are supposed to do?
There are other add-on costs. New and elaborate procedures will have to be set in place at the interfaces between the contracted functions and those which are retained within the public sector.
For example, can the Minister tell the House the cost of the enhanced audit procedures which will be needed if remittance processing work is ultimately contracted out? Will incidental monitoring costs and those at interfaces be included in the Minister's value-for-money calculation, or will they be conveniently overlooked—in the same way as the consultancy costs of more than £250,000 have apparently been overlooked?
Companies House has earned the support of its customers because of its willingness to meet changing needs. That willingness for advancement continues, as the Minister has admitted already. Will not contracting out inhibit the changes and the innovations which are currently occurring?
How will the Minister proceed if a contractor cannot or will not agree to changes during the life of the contract? Will the Minister pay off the contractor and waste even more public money, or will he offer short-term contracts and bring in contractors who lack both loyalty and dedication—thus endangering the dedication and the loyalty of the staff who currently work within the public sector but who are now possibly expected to work for short-term contracts? Such questions understandably worry the customers of Companies House. If the Minister is concerned about those matters, he will withdraw the order this evening.
The overwhelming result of the Government's review of Companies House was a clear endorsement of the efficient, accountable and innovative work of its staff. The private consultancy firm SRU Ltd. found that there was no customer demand for wholesale privatisation—indeed, the business consumers of the services were very vocal in opposing any change. I believe that wholesale privatisation would have been carried out before now—the desire was there—had it not been for the tremendous effort on the part of the staff in campaigning and gaining support for their work.
Furthermore, wholesale privatisation would have required primary legislation, and it would have involved protracted debate in the House and in another place. During that debate, it would have become increasingly clear that the business community did not support the Government's policies, and that the Government majority could not be guaranteed in this place. Instead of an open and honest privatisation measure, we have a back-door, creeping privatisation in the form of contractorisation.
The order allows for the piecemeal contracting out of the services, and will involve about 30 per cent. of staff in Edinburgh, London and Cardiff. Why are the Government pursuing that policy when we have demonstrated that there is no demand for it? Twelve months ago, the President of the Board of Trade—the Minister's boss—promised to sweep out civil service jobs in an orgy of privatisation. In the Post Office, and in agencies such as Companies House, he has faced defeat. The case for the privatisation revolution has been tested and it has been found wanting, not least by the lack of public support throughout the country.
Tonight's order is not about efficiency or value for money; it is simply a face-saving device for the President of the Board of Trade, who has his eyes fixed upon the leadership of his party. The Opposition have no intention of saving the face of the President of the Board of Trade.

Mr. Nick Harvey: I must probe briefly the question of in-house bids. Why will the Minister not allow in-house bids for any of the services that are to be contracted out? As the Minister knows, Companies House previously made an in-house bid for a contracted service—the directors register—which it won. In those circumstances, it is all the more surprising that the Minister has decreed that there will be no in-house bids for contracts under the order unless the staff who make the bids resign from the civil service if their bids are successful.
That seems to confirm the idea that the Government are preoccupied with reducing the number of people employed in the civil service. Ministers have made it clear that this measure is to be just the first part of progressive contractorisation. Is there not a risk that bids from outside will be artificially low and will be used as loss leaders by companies which have designs on getting other work in the future? If the Government were to accept unnecessarily low bids, the idea of a level playing field would be lost, as would any true value for money.
Relatively few companies which are involved in this sort of work could, on the basis of their existing activities, bid for the functions that will be covered by the order. Therefore, there seems to be an inherent danger of creating a private sector monopoly if the contract goes to any of the current leaders in the field.
Will the Minister reconsider his decision not to allow in-house bids for the services, or will he confirm that one of the main objectives of the process is to reduce the number of people employed in the civil service? Is he not concerned about the real risk of creating a private sector monopoly?
If he does not envisage the existing market leaders as the most likely bidders for the contract—taking up the point that the hon. Member for Cardiff, Central (Mr. Jones) made—how does he expect the technological advances, which have proved so successful in the recent past, to continue into the future? If contracts are short-term, how will high-quality service, to which several hon. Members have referred, be retained? Those questions must be answered, and it will be interesting to hear how the Minister will respond to them.

Mr. Eric Clarke: I intend to concentrate my remarks on the Scottish registry. Edinburgh is obviously a very important city in Scotland, particularly as a financial and commercial centre, together with Glasgow and other cities. The Scottish registry in Edinburgh employs 46 staff, and it performs, in microcosm, all the functions of its larger counterpart for England and Wales. If the Scottish registry is contracted out successfully, we believe that the Government will use that experience as a testbed for contracting out or privatising all Companies House services at a later date.
Furthermore, the functions of the Scottish registry include discretionary powers which are presently held by the Secretary of State and relate to special dispensations—for example, allowing delays in the delivery of company accounts. The laws of Scotland are different from those of England and Wales, so the order will have a particular effect in Scotland.
The customers of the Scottish registry are overwhelmingly opposed to its transfer into public hands. Across all four user categories in Scotland, there appears to be a great uniformity of view. In summary, the view is sceptical—much as it is south of the border. Users' arguments against the contractor-run system in the illustrative proposition also fall along similar lines.
The arguments are as follows:
very impressed with CH progress over the last few years";
little scope seen for a private sector contractor to make further improvements";
much scope for someone ignorant of the business to make it worse; concern about the excessive rigor in the enforcement of civil penalties, and more widely about the substitution of commercial interests in cutting corners for civil service impartiality and objectivity; concern about the loss of direct customer access to the Registrar for Scotland in Scotland, and about the Registrar's potential loss of the pool of expertise he draws on among senior staff on the interpretation of the Companies Acts, notably in relation to the registrability of charges (the question was raised of whether the boundary between the public sector and the contractor could be moved to leave such expertise with the Registrar); strong belief that individual access should continue to be available as a matter of statutory right through a search room, in Scotland, to current standards; a strong belief that the issues of conclusive certificates (eg Certificates of Incorporation, Change of Name, Re-registration and Registration of Charges), the pursuit of compliance targets and ensuring that information is available to the public on request at all times should be the responsibility of a public official.
Those are the views of the customers of the organisation.
If the order is approved, it is likely that the regulation and the overseeing of corporate affairs in Scotland will be by a English facilities and management company, as there are no Scottish companies in the requisite field, according to my advisers. Companies will probably tender for the Scottish operation with an eye on the ball to take over the whole scheme at a later date.
Once again, Scotland is being used for an experiment, as we were with the poll tax. Here, we are being used in a political experiment, for a practice run before London and Cardiff, and we do not like it.
We know that the Government have abandoned the electorate north of the border, but the wishes of the companies, the firms, the business and the commercial interests in Scotland are another matter. I ask the Government to reconsider their attitude totally.
The measure also means that the key discretionary powers, including the timing of the delivery of company accounts, will be put in the hands of the private sector. Have the Government failed to learn the lessons of Maxwell and Blue Arrow? If the private sector cannot be trusted properly to regulate itself, how can the Minister propose allowing a successful bidder for the Scottish registry to regulate the affairs of other companies? Has the Minister never heard of a conflict of interest, or does propriety in business affairs no longer matter?
Finally, I ask the Minister to tell his future grandchild, "I was the man who had the courage to withdraw the order," bearing in mind the argument that was put up not just by Opposition Members, but by the whole of society, including the City of London. He should stop it on that basis and prevent the potential corruption of corporate regulations, particularly in Scotland.

Mr. Gordon Prentice: I shall be brief, but I want to pick up a couple of points that were raised by my


hon. Friends. They concern the support for the proposal outside, and the costs and benefits involved. The whole exercise is ideologically driven. If we look at it objectively, it does not stand up.
Last week, the Minister circulated to the hon. Member for Isle of Wight (Mr. Field), who chairs the deregulation committee, this report by the Anglo-German Deregulation Group. It sets out a checklist of questions that need to be taken into account if a Government want to deregulate something. I shall mention just a few of them. The report asks:
Why is the legislation necessary? Is the legislation justified? … What are the economic costs and benefits? … What are the proposal's effects on business? … Which organisations have been consulted and what are their views?
The British Government have put their hand to the document, but, if we substitute contracting out for deregulation, there are already many unanswered questions. I apply the last one:
Which organisations have been consulted and what are their views?
to the proposal to contract out the services of Companies House.
My hon. Friend the Member for Midlothian (Mr. Clarke) mentioned the report that the DTI commissioned from SRU, which states very clearly that there is absolutely no support for what the Government are proposing. The Minister shakes his head, but let me refer directly to the summary of the report.
The consultants commissioned by the Government say:
We have taken soundings from over 150 organisations on Government proposals".
I should like to know how many of those 150 organisations support the proposal and how many are against it. The report states that there
is no significant user demand for such a move. Presenters and searchers are sceptical about possible gains and are concerned about the possible degradation of a vital public service.
The report continues:
Market concerns about value for money focus on quality standards … not cost. 
We heard earlier that, in the past five or six years, Companies House has turned the position around and is producing a gold-plated service that people value.
Finally, the consultants say:
The process of contracting out would be expensive and complex.
When the Minister replies to the debate, will he tell us what are the costs and what are the benefits that are flagged up in the document that he circulated to the hon. Member for Isle of Wight and myself only a few days ago?

Mr. Bell: With the leave of the House, I am grateful for the opportunity to add to my earlier comments. The Minister asked me what confidential matters were covered by Companies House and, through my own civil service, I am able to advise him that they concerned enforcement.
I was glad to see the hon. Member for Cardiff, North (Mr. Jones), the Under-Secretary of State for Wales, in his place earlier, as Companies House is in his constituency. I

was sorry that he could not stay for the full debate and listened for only five minutes, but I am sure that he will read it all with great interest in Hansard tomorrow.
My hon. Friend the Member for Cardiff, Central (Mr. Jones) talked about value for money. He is perfectly right to say that, if one were to accept the Government's criteria for value for money, we would accept that, over the years, and certainly now, value for money is, has been and will be given by Companies House.
As the Minister said in his opening remarks, because of the changes made at Companies House, the agency and training arrangements were and have been independent of the Treasury for some time. It was a successful arrangement, which was helpful to all. Everyone knew where they were, and had a sense of security. Only since the reviews has the sense of security disappeared.
In a speech that was cogent and to the point the hon. Member for North Devon (Mr. Harvey) mentioned the in-house bid for a contracted service. He was right to do that, because in the past there has been a bid for a contracted service—the directors register. The in-house work force bid successfully for that. I understand that the Minister—he may contradict me or confirm this—is prepared to accept in-house bids on contracts under the order, but wishes the staff who are part of the bid to withdraw or resign from the civil service. That is a significant point.
My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) referred to the protection of the civil service. There is a contradiction in trying to privatise a private function such as Companies House. It is run by civil servants and will be taken out, through contractorisation, into the private sector. Yet an in-house bid cannot, according to the Government, be allowed, because the staff would still be civil servants. The Minister might wish to take that into account when he reviews the process of tendering.
The debate may end a little earlier, and our right hon. and hon. Friends are waiting with bated breath in the Corridors of the House to rush in and vote on this significant—from the Government's point of view—measure. I see that the Government Whip has arrived to marshal the troops.
The arguments against the order may be summarised as follows. Contracting out runs contrary to the advice by the Government's own consultants. I made that point in my earlier remarks. Those consultants were engaged to reflect the views of users and customers, and users and customers were satisfied with the service. There was no grass roots demand for a contracting out, a privatisation, partial or public. Contracting out is a costly exercise, with public money being spent on monitoring the contracts and setting up new procedures at the interface, with functions kept within the public sector.
A view was expressed that contracting out will introduce the profit motive into what is essentially a public service. Indeed, the Minister spoke earlier of value for money. As a result of the profit motive, functions may not be carried out even-handedly or with adequate concern for the public good, which will lead to job losses and poorer service for customers, and will have an adverse effect on business confidence.
In all the privatisations of public sector monopolies, there has never been a proper accompanying regulation. The process of privatisation creates more problems on


regulation than the actual privatisation. In privatising gas, electricity and water, no one foresaw the difficulties and the problems. The Labour party's submission is that this order, this contractorisation, this step to partial or full privatisation between now and 1996, will be extremely difficult for the Government to regulate, or even for them to have it regulated within the framework of their own Acts of Parliament.
The Minister said earlier that the discretionary powers of the Secretary of State, which are laid down in statute in the House, will continue whether Companies House is in the private or the public sector. How does one regulate or supervise such a privatisation or contractorisation?
My hon. Friend the Member for Midlothian (Mr. Clarke) made a bold point: the Minister should stand at the Dispatch Box and create history by saying to the House, "I am so convinced by the arguments of the Opposition that I am withdrawing this order and we are not going ahead. We will take into account the views and anxieties that have been expressed and the concerns of the work force." I do not believe that he will do that. I have a sixth sense that that will not happen.
The Minister will have to direct his constructive mind—I speak as a fellow member of his profession—and think carefully about how the contractorisation will take place and about the arguments that the Opposition have made. If he did that, in the spirit of democracy, something constructive might come out of the debate.

Mr. Jonathan Evans: I am glad that the hon. Member for Middlesbrough (Mr. Bell) made reference to the presence in the House of my hon. Friend the Member for Cardiff, North (Mr. Jones), the Under-Secretary of State for Wales, who has been in touch with me in relation to this issue during the time that the matter has been under consideration.
While listening to the hon. Member for Middlesbrough, it was difficult to know exactly where he stood. He began by criticising the Government for not going further. In a way, I rather thought that we would have had an easier ride from the Opposition if the proposal today had been for full privatisation of all the functions at Companies House. That would truly be a face of new Labour.
The hon. Gentleman referred to this as a fag-end order. It was difficult to understand why he referred to matters in that way, until I had the opportunity to see a letter that has come from the trade unions at Companies House and was sent to all Labour Members. It invites people to write to the President of the Board of Trade, concerning this issue. It has an interesting last paragraph:
If you are writing to a Labour MP, insert the following paragraph. Can you stress the importance of this matter to the Labour Trade and Industry team?
That seems to indicate that in spite of the fact that most of the Labour trade and industry team are sponsored by trade unions. In relation to this order, they could not work up much enthusiasm. That is clear from the remarks of the hon. Gentleman.
What were the hon. Gentleman's complaints? He complained about confidentiality, and tried to suggest that there are dark and secret papers, all held at Companies House, which some wicked contractor is going to put out into the public domain. The fact is that, even after taking advice, the best he was able to come up with is that

somebody might be writing to Companies House to explain why they were late filing papers. That was the best he could put before us in terms of the confidential information that he says might go into the public domain if we were to proceed with the order.
After a time, the hon. Gentleman gave up altogether, perhaps because he recognised that both agency and trading fund status were opposed at the time that the Government introduced them, but that they have contributed to improving delivery of services at Companies House. The excellent performance of Companies House has been brought about as a result of reviews and changes that the Government have made in the face of opposition from Labour Members. The hon. Gentleman did not want to talk about Companies House at all then, but got into a diatribe about how the Government have not done enough on deregulation.
The hon. Gentleman offered to be the champion of small business and to help the Government in deregulating. He will know that I have a special responsibility for deregulation. I will note carefully his remarks in that regard in Hansard, and will certainly be looking to his support when the Government introduce a whole range of changes—as we intend to do—to alleviate the burdens on small business. Bearing in mind his strong remarks today, we shall be looking for support from Opposition Members. While, privately, it is possible that the hon. Gentleman would be supportive, I am not so sure that the same could be said of those who sit on the Benches behind him.
We heard from the hon. Member for Cardiff, Central (Mr. Jones), who was rather more bullish in his condemnation of the Government. He had taken a line from the same union hymn sheet. We know how inaccurate the trade unions in Companies House have been in the information that they have put into the public domain.
I had to deal in January with an allegation that the Government were sitting on a confidential report that had been leaked to the Western Mail, until we were able to point out to the Western Mail that the SRU report was in the public domain, had been in the House of Commons Library since December, and was in the public libraries in Wales as well.

Mr. Jon Owen Jones: Talking of trade union accuracy, when I wrote to the Minister asking how much the SRU report had cost, I was told that it had cost £189,000. Two weeks later, I received a letter saying, "Sorry, we made a mistake: it cost £100,000 more than that." There are other areas where we can look for inaccuracy.

Mr. Evans: I am sure that the hon. Gentleman will wish to take advantage of this opportunity to congratulate the Government on putting that information in the public domain.
The order reflects the Government's response to the SRU report. Much of what Opposition Members have said relates to a question with which we are not dealing. We have heard some quotations, but the report states:
We have taken soundings from … 150 organisations on Government proposals"—
let me stress this to the hon. Member for Pendle (Mr. Prentice)—
to contract out most Companies House … functions".
The order does not do that.
The statement by my right hon. Friend the President of the Board of Trade on 20 December reflected the report, and particularly a part of it from which no Opposition Member has quoted. Paragraph 6.9, on page 32, makes it clear that user preference was for Companies House to remain a public agency, but that that should include the right to contract out operations
that CH management consider can be better undertaken by specialist contractors.
That provision appears in the report itself, and it is the provision to which the Government are giving effect in the order. I commend it to the House.

Question put:—

The House divided: Ayes 219, Noes 139.

Division No. 122]
[5.31 pm


AYES


Ainsworth, Peter (East Surrey)
Dorrell, Rt Hon Stephen


Aitken, Rt Hon Jonathan
Douglas-Hamilton, Lord James


Alexander, Richard
Dover, Den


Alison, Rt Hon Michael (Selby)
Duncan, Alan


Allason, Rupert (Torbay)
Dunn, Bob


Amess, David
Durant, Sir Anthony


Arnold, Jacques (Gravesham)
Eggar, Rt Hon Tim


Arnold, Sir Thomas (Hazel Grv)
Elletson, Harold


Atkinson, David (Bour'mouth E)
Emery, Rt Hon Sir Peter


Atkinson, Peter (Hexham)
Evans, David (Welwyn Hatfield)


Baker, Nicholas (North Dorset)
Evans, Jonathan (Brecon)


Baldry, Tony
Evans, Nigel (Ribble Valley)


Batiste, Spencer
Evans, Roger (Monmouth)


Bellingham, Henry
Evennett, David


Bendall, Vivian
Faber, David


Body, Sir Richard
Fabricant, Michael


Booth, Hartley
Fenner, Dame Peggy


Boswell,Tim
Field, Barry (lsle of Wight)


Bottomley, Rt Hon Virginia
Fishburn, Dudley


Bowden, Sir Andrew
Forman, Nigel


Bowis, John
Forsyth, Rt Hon Michael (Stirling)


Boyson, Rt Hon Sir Rhodes
Forth, Eric


Brandreth, Gyles
Fox, Dr Liam (Woodspring)


Brazier, Julian
Fox, Sir Marcus (Shipley)


Bright, Sir Graham
Freeman, Rt Hon Roger


Brooke, Rt Hon Peter
French, Douglas


Brown, M (Brigg & Cl'thorpes)
Fry, Sir Peter


Browning, Mrs Angela
Gale, Roger


Burns, Simon
Gardiner, Sir George


Burt, Alistair
Gill, Christopher


Butler, Peter
Gillan, Cheryl


Carlisle, John (Luton North)
Goodlad, Rt Hon Alastair


Carrington, Matthew
Goodson-Wickes, Dr Charles


Carttiss, Michael
Gorman, Mrs Teresa


Cash, William
Gorst, Sir John


Channon, Rt Hon Paul
Grant, Sir A (SW Cambs)


Chapman, Sydney
Greenway, Harry (Ealing N)


Clappison, James
Greenway, John (Ryedale)


Clark, Dr Michael (Rochford)
Griffiths, Peter (Portsmouth, N)


Clarke, Rt Hon Kenneth (Ru'clif)
Hague, William


Clifton-Brown, Geoffrey
Hamilton, Rt Hon Sir Archibald


Coe, Sebastian
Hamilton, Neil (Tatton)


Colvin, Michael
Hampson, Dr Keith


Congdon, David
Harris, David


Coombs, Simon (Swindon)
Haselhurst, Alan


Cope, Rt Hon Sir John
Hawkins, Nick


Couchman, James
Hawksley, Warren


Cran, James
Heald, Oliver


Currie, Mrs Edwina (S D'by'ire)
Heathcoat-Amory, David


Davis, David (Boothferry)
Hendry, Charles


Day, Stephen
Hill, James (Southampton Test)


Devlin, Tim
Howard, Rt Hon Michael


Dicks, Terry
Howell, Rt Hon David (G'dford)





Howell, Sir Ralph (N Norfolk)
Richards, Rod


Hughes, Robert G (Harrow W)
Robathan, Andrew


Hunt, Sir John (Ravensbourne)
Robinson, Mark (Somerton)


Hunter, Andrew
Rowe, Andrew (Mid Kent)


Hurd, Rt Hon Douglas
Rumbold, Rt Hon Dame Angela


Jack, Michael
Ryder, Rt Hon Richard


Jenkin, Bernard
Sainsbury, Rt Hon Sir Timothy


Jessel, Toby
Shaw, Sir Giles (Pudsey)


Johnson Smith, Sir Geoffrey
Shephard, Rt Hon Gillian


Jones, Gwilym (Cardiff N)
Shersby, Michael


Jones, Robert B (W Hertfdshr)
Sims, Roger


Key, Robert
Skeet, Sir Trevor


King, Rt Hon Tom
Smith, Sir Dudley (Warwick)


Kirkhope, Timothy
Smith, Tim (Beaconsfield)


Knapman, Roger
Soames, Nicholas


Knight, Mrs Angela (Erewash)
Speed, Sir Keith


Knight, Greg (Derby N)
Spicer, Sir James (W Dorset)


Knox, Sir David
Spicer, Michael (S Worcs)


Lait, Mrs Jacqui
Spink, Dr Robert


Lang, Rt Hon Ian
Spring, Richard


Lawrence, Sir Ivan
Sproat, Iain


Legg, Barry
Squire, Robin (Hornchurch)


Leigh, Edward
Stanley, Rt Hon Sir John


Lester, Jim (Broxtowe)
Steen, Anthony


Lidington, David
Stephen, Michael


Lilley, Rt Hon Peter
Stem, Michael


Luff, Peter
Streeter, Gary


MacGregor, Rt Hon John
Sweeney, Walter


MacKay, Andrew
Sykes, John


McNair-Wilson, Sir Patrick
Tapsell, Sir Peter


Madel, Sir David
Taylor, Ian (Esher)


Maitland, Lady Olga
Taylor, John M (Solihull)


Malone, Gerald
Temple-Morris, Peter


Mans, Keith
Thomason, Roy


Marshall, John (Hendon S)
Thompson, Sir Donald (C'er V)


Martin, David (Portsmouth S)
Thompson, Patrick (Norwich N)


Merchant, Piers
Townend, John (Bridlington)


Mitchell, Andrew (Gedling)
Townsend, Cyril D (Bexl'yh'th)


Mitchell, Sir David (NW Hants)
Tracey, Richard


Moate, Sir Roger
Trotter, Nevillie


Monro, Sir Hector
Twinn, Dr Ian


Montgomery, Sir Fergus
Vaughan, Sir Gerard


Neubert, Sir Michael
Viggers, Peter


Newton, Rt Hon Tony
Waldegrave, Rt Hon William


Nicholls, Patrick
Walden, George


Nicholson, David (Taunton)
Walker, Bill (N Tayside)



Waterson, Nigel


Nicholson, Emma (Devon West)
Watts, John


Norris, Steve
Wells, Bowen


Onslow, Rt Hon Sir Cranley
Wheeler, Rt Hon Sir John


Oppenheim, Phillip
Whitney, Ray


Paice, James
Whittingdale, John


Patnick, Sir Irvine
Wilshire, David


Peacock, Mrs Elizabeth
Winterton, Mrs Ann (Congleton)


Pickles, Eric
Wolfson, Mark


Portillo, Rt Hon Michael



Powell, William (Corby)
Tellers for the Ayes:


Rathbone, Tim
Timothy Wood and


Renton, Rt Hon Tim
Derek Conway.




NOES


Adams, Mrs Irene
Boateng, Paul


Ainger, Nick
Brown, N (N'c'tle upon Tyne E)


Armstrong, Hilary
Byers, Stephen


Ashton, Joe
Callaghan, Jim


Austin-Walker, John
Campbell-Savours, D N


Banks, Tony (Newham NW)
Clapham, Michael


Barnes, Harry
Clarke, Eric (Midlothian)


Bayley, Hugh
Coffey, Ann


Bell, Stuart
Cook, Frank (Stockton N)


Benn, Rt Hon Tony
Corbett, Robin


Bennett, Andrew F
Corston, Jean


Benton, Joe
Cox, Tom


Bermingham, Gerald
Dalyell, Tam


Betts, Clive
Darling, Alistair


Blunkett, David
Davidson, Ian






Davies, Bryan (Oldham C'tral)
Maxton, John


Denham, John
Meale, Alan


Dewar, Donald
Michael, Alun


Dixon, Don
Michie, Bill (Sheffield Heeley)


Dobson, Frank
Milburn, Alan


Dunwoody, Mrs Gwyneth
Miller, Andrew


Eastham, Ken
Morgan, Rhodri


Etherington, Bill
Morley, Elliot


Fatchett, Derek
Morris, Rt Hon Alfred (Wy'nshawe)


Flynn, Paul
Morris, Estelle (B'ham Yardley)


Foster, Rt Hon Derek
Mudie, George


Foster, Don (Bath)
Mullin, Chris


Godman, Dr Norman A
Murphy, Paul


Grant Bernie (Tottenham)
O'Brien, Mike (N W'kshire)


Grocott, Bruce
O'Brien, William (Normanton)


Gunnell, John
O'Hara, Edward


Hain, Peter
Olner, Bill


Hanson David
Orme, Rt Hon Stanley


Harvey, Nick
Pendry, Tom


Henderson, Doug
Pickthall, Colin


Heppell, John
Pike, Peter L


Hill, Keith (Streatham)
Prentice, Gordon (Pendle)


Hinchliffe, David
Prescott, Rt Hon John


Hoon, Geoffrey
Purchase, Ken


Howarth, George (Knowsley North)
Raynsford, Nick


Howells, Dr. Kim (Pontypridd)
Rendel, David


Hoyle, Doug
Roche, Mrs Barbara


Hughes, Kevin (Doncaster N)
Rooker, Jeff


Hughes, Robert (Aberdeen N)
Rooney, Terry


Hughes, Roy (Newport E)
Ross, Ernie (Dundee W)


Hutton, John
Sedgemore, Brian


Illsley, Eric
Shore, Rt Hon Peter


Ingram, Adam
Short, Clare


Jackson, Helen (Shef'ld, H)
Skinner, Dennis


Jones, Jon Owen (Cardiff C)
Smith, Andrew (Oxford E)


Jones, Lynne (B'ham S O)
Smith, Chris (Isl'ton S & F'sbury)


Jones, Martyn (Clwyd, SW)
Soley, Clive



Spearing, Nigel


Jones, Nigel (Cheltenham)
Spellar, John


Jowell, Tessa
Stevenson, George


Keen, Alan
Sutcliffe, Gerry


Khabra, Piara S
Taylor, Mrs Ann (Dewsbury)


Kilfoyle, Peter
Taylor, Matthew (Truro)


Lestor, Joan (Eccles)
Thompson, Jack (Wansbeck)


Lewis, Terry
Timms, Stephen


Livingstone, Ken
Tipping, Paddy


Loyden, Eddie
Walker, Rt Hon Sir Harold


Lynne, Ms Liz
Wicks, Malcolm


McAvoy, Thomas
Wigley, Dafydd


McCartney, Ian
Williams, Alan W (Carmarthen)


McKelvey, William
Winnick, David


Mackinlay, Andrew
Wise, Audrey


McMaster, Gordon
Worthington, Tony


MacShane, Denis



McWilliam, John
Tellers for the Noes:


Madden, Max
Mr. John Cummings and


Marek, Dr John
Mr. Jim Dowd.

Question accordingly agreed to.

Resolved,
That the draft Contracting Out (Functions in relation to the Registration of Companies) Order 1995, which was laid before this House on 6th March, be approved.

Local Government Finance

The Parliamentary Under-Secretary of State for Health (Mr. John Bowis): I beg to move,
That the Special Grant Report (No. 13) (House of Commons Paper No. 286), which was laid before this House on 13th March, be approved.
The report sets out the proposed allocation of the special transitional grant to local authorities in England for the next financial year for expenditure on community care services. It also describes the main features of the grant and the conditions that the Government intend to attach to its use.
It is two years since the introduction of the community care reforms, which allow people to receive better-targeted care to meet their needs. Under the old system of community care, before the introduction of the reforms, people who asked their local authority for help would be fitted into a system of predetermined service provision.
We have turned all that around by requiring social services to assess an individual's needs and then to decide what service to provide. It is a complete change of perspective, putting the client first, changing from a ready-to-wear to a tailor-made approach. It is the right policy. It has been universally recognised as such. It is popular with local authorities that implement it and with the many individuals who benefit from it.
The improvements brought about by the community care reforms have been clearly recognised. Last December, the Audit Commission published its second report, called "Taking Stock: Progress with Community Care", on the implementation of the reforms. It says that authorities have become more sensitive to their populations' needs. They are promoting flexibility and exploring new options for service provision—new ways of doing things to make services more appropriate to the needs of the people whom they serve. We shall shortly publish our latest monitoring report, which shows the same picture—services that more accurately reflect the needs of users, more support for carers and innovative approaches to care provision.
Of course there is still more work to be done. We have always said that it would take some time for the full benefits of the community care reforms to show through. Such a radical sea change from service-led to user-led care cannot happen overnight. Both the Audit Commission's report and our monitoring report highlight sectors where further development is necessary. We shall be launching a community care development programme, which will take that important policy forward.

Mr. Barry Field: I sincerely thank my hon. Friend for seeing the Isle of Wight delegation not once but twice to discuss care in the community. Will he confirm that the development order provides the opportunity for the Isle of Wight's particular needs to be considered?

Mr. Bowis: I am grateful to my hon. Friend. I pay tribute to the way in which he has presented his constituents' case and carefully considered the allocation of resources for the Isle of Wight last year and for the coming year. I give him the undertaking that I gave to the delegation who accompanied him. If they will put their


minds to finding new ways of considering the allocation of resources, and to new points about the identification of the island's particular needs, I should be more than happy to consider them, where they fall within my orbit, and to pass them on to my right hon. Friend the Secretary of State for the Environment, where they relate to his Department.
I pay tribute not only to the points raised by my hon. Friend but to what he has achieved in terms of the fire service allocations, which have been at the root of a number of the social service problems perceived in that island. Given the increase in resources this year, that gives the island's social services leadership the opportunity to bring, if it wishes, better financial control to the island's social services budgets, so that it can provide good services for all the people of the island.

Mr. Field: Would my hon. Friend be pleased to hear that, as a result of his comments, Isle of Wight county council has decided to spend up to its standard spending assessment for care in the community and social services?

Mr. Bowis: I am delighted to hear what my hon. Friend says about the island. It is a matter of record that, although the island's current political leadership has been complaining about the resources allocated by central Government for the island's social services, the budgets that it has produced have not required all those resources. Let me add that, in 1990–91, the Isle of Wight personal social services budget was £8.4 million; in the coming year, it will be £17.4 million, a substantial increase in anyone's mathematical book.
It is also our intention to give disabled people greater independence by the provision of direct cash payments in lieu of services, an exciting and far-sighted policy which has been unanimously welcomed. We shall be working out the necessary proposals.
The special grant report gives the amount of special transitional grant for each English local authority for 1995–96. The total amount of the grant is £647.6 million, a very substantial sum. The grant for 1995–96 is the third tranche of money that the Government have provided for local authorities' new community care responsibilities. That money is intended to cover the estimated costs of care of those people who, under the previous funding system, would have entered non-local authority residential care, funded by Department of Social Security benefits; but it is more than that—in 1995–96, it is £170 million more than that, or £170 million more than the DSS would have spent under the previous arrangements.
Thus, the Government have amply fulfilled their promise to fund community care fairly. In 1995–96, the total provision for local authorities' new responsibilities will be £1.8 billion. That is 44 per cent. higher than in the current year. It is a very large sum of money, but it is still only a small portion of the Government's total provision for community care, which will be a massive £5.1 billion, representing a 12 per cent. increase over the current year. That is on top of other generous increases throughout the decade. Since 1990–91, the funding that the Government have provided for community care services has more than doubled. These are impressive statistics indeed.
Yet some authorities appear to believe that the only money that the Government have provided for community care is the special transitional grant. To them I have to say that is nonsense. Local authorities have had community care responsibilities, and funding for those responsibilities, for very many years, long before 1993. Community care was not invented on 1 April 1993; that is when it was reformed. All the part III accommodation, the council meals and home support services, all the council respite and day care services were and remain social service community care responsibilities.
Beyond the ring-fenced element of the STG, it is, of course, up to local authorities to decide how much of their general funding they spend on community care, but they must not pretend that the provision that we have made for their new responsibilities is intended to cover all their responsibilities. One has to consider all the available resources and deploy them, and redeploy them if necessary, to cope with the demands on the service. It is, therefore, quite extraordinary for authorities to claim that they have run out of money for community care services. As I said, the total amount available exceeds £5.1 billion. That is what authorities should be focusing on.
The special grant report also sets out the conditions of payment of the special transitional grant. For 1995–96, as for the previous two years, we have required local authorities to reach agreements with their health authorities on hospital discharge procedures and on their respective responsibilities for long-term care. All local authorities have done so.
We have stressed that effective collaboration between health and local authorities is a necessary element in the success of community care. Our recent guidance entitled "NHS Responsibilities for Meeting Continuing Health Care Needs" reinforces that and the fact that the NHS is required to provide cradle-to-grave health care.
We have made it clear that health authorities must arrange and fund a full range of services to meet continuing health care needs. The NHS executive will actively ensure that the guidance is followed. That will be as welcome to local government as it is to the health services themselves and, indeed, to representatives of users of the service and carers.
We are also again using the grant to support the mixed economy of care by retaining the condition that requires local authorities to spend at least 85 per cent. of the social security transfer element of the STG in the independent sector. That gives stability and security to the residents of that sector and time for the independent sector to consider diversification if it wishes.

Mr. David Hinchliffe: Will the Minister confirm that it is still Government policy to have a mixed economy of care? If it is, will he explain why his colleagues at the Department of the Environment, in their consultation document on the deregulation of local government which is the subject of consultation, propose that the statutory duty for the provision of part III accommodation for the care of the elderly should be removed and that it should no longer be a legal duty of councils to provide their own care homes? That seems to be a move away from a mixed economy of care.

Mr. Bowis: That is a debate for another day, but the hon. Gentleman does not make a fair point. We are looking for good-quality care at a reasonable price, irrespective of which sector it may come from. If local


authorities believe that all their needs can be met in one or more of those sectors, the hon. Gentleman should not oppose that. If one can get better-quality care at a better price from the independent sector, the only person who could conceivably object would be an idealogue. I am not suggesting that the hon. Gentleman is an idealogue, but I am suggesting that, occasionally, some of his colleagues in local government are.

Mr. Hinchliffe: The Minister should bear in mind the fact that many people make a positive choice to enter local authority care homes. In Wakefield, for example, each of the major estates has had a care home built since the last war. Many people who have lived in those communities choose to enter those care homes. My concern is that the Government are removing choice. "Choice" must surely mean the ability to select good-quality public sector care. Does the Minister put a price on that choice? It appears so.

Mr. Bowis: The hon. Gentleman is confusing the issue. The people to whom he referred are not choosing a home on the basis of whether it is managed by the council or by the voluntary or private sectors; they are saying that they should like to go into a particular home. Many authorities are finding that those homes can offer better-quality care if the management of those homes is put out to tender. That is perfectly fair.
The hon. Gentleman let the cat out of the bag by saying that people should be able to make a positive choice. People can have a positive choice only if they have a real and informed choice. That is not the case in many parts of the country. If people are given a choice at all, it is whether they would like to go into this council home or that council home. That is not a real choice. We believe that a range of options should be placed before the individual along with information about residential care, if that is what is deemed appropriate. The individual should then have a choice of home, irrespective of which sector it is in.

Mr. Hinchliffe: I do not want to pursue the matter for too long, but it is important to place on record our concern about the fact that the Government constantly say that private sector provision is cheaper. Has the Minister examined why that is so in some instances? Has he, for example, considered public sector investment in the training of many care staff who are subsequently recruited by the private sector? If we are to be able to compare like with like, the private sector should take the training of care and social work staff as seriously as the public sector. Would not the situation then be rather different?

Mr. Bowis: The hon. Gentleman is, in fact, further making my case. Backgrounds costs such as training, solicitors' fees and other costs are exactly the costs that are often omitted from the notional price of the council or state sector. They are often not incorporated in the price when the comparison is made. In the independent private or voluntary sector, all the costs of training and managing those homes have to be incorporated in the price which people pay. The hon. Gentleman may think that price is insignificant. He may say that it is not important. Indeed, it is not the only factor. Quality and price matter, and one looks for both.
When I was in Lancashire last week, it was put to me that using council-run residential homes rather than homes in the independent sector cost £93 per person a week more. There was a comparable price difference between

using the independent sector and council-run domiciliary services. If those figures were added up—I cannot vouch for the figures, but I put them to the leader of Lancashire council and the chairman of social services and they did not in any way deny them—they could result in savings to Lancashire county council of some £15 million. The council could extend services to people in need with that £15 million. What is it doing? It is removing services from people who need home help and other services in their homes and blaming that on its lack of resources. The resources are there. The efficient use of resources is not.

Mr. Roger Sims: As my hon. Friend mentioned, a number of former council homes are now run by other organisations and are thus classified as being in the independent sector, under the terms that he has been discussing. Has he received representations from organisations representing private homes that complain that some local authorities tend to give preference to those former council homes at the expense of private homes, despite the fact that the quality may be inferior and the fees charged are often considerably higher? It is not a level playing field for all those in the so-called independent sector. Is my hon. Friend taking steps to put that matter right?

Mr. Bowis: I am grateful to my hon. Friend. I have certainly had representations on exactly those points from hon. Members from all parties on behalf of many care home managers and owners. They are complaining that, in many cases, there is not a level playing field. They feel that, too often, contracts are placed for ideological reasons and that they are far too cosy for their previous owners and runners in the council sector for comfort and for justice to be seen to be done.

Mr. Rupert Allason: Will my hon. Friend give way?

Mr. Bowis: I shall in a second. I recall one case in respite care in which those who went to former council homes in a trust and therefore technically in the voluntary sector were paying some £375 a week for a service which, had they gone to private sector homes—which are probably more comfortable and certainly just as good—would have cost £300 a week. Again, it is a question not of inferior quality but of good quality at a lower price which means more resources are available for other people.

Mr. Allason: May I draw my hon. Friend's attention to the extraordinary disparity in Devon? It is not unusual for a local authority home there to offer a more expensive service, thereby incurring far more expenditure, yet, curiously enough, it does not reach the standard set by the private sector. What really irks the private sector is that the local authority is responsible for registration, supervision and the setting of standards which come nowhere near the standards already set in the private sector.

Mr. Bowis: My hon. Friend makes a valid point. Our overall review on inspection this year will certainly want to look very carefully at the way in which the public sector is inspected. We require it be inspected to the same standard as that required in the independent sector and we need to be sure that that is not only done but seen to be done. We know what happens when homes fall below


standard in the independent sector, but we do not always know what happens—perhaps we do—in the public sector.
I shall return to the point made by my hon. Friend the Member for Chislehurst (Mr. Sims), because I omitted to tell him what steps are being taken in the matter to which he referred. The independent district auditors are responsible for value for money. It is time that more cases were submitted for their consideration.
I shall pursue the explanation of the minor change in the condition required of local authorities. The condition is cumulative and therefore bites on expenditure in the independent sector going back to 1992–93, the year before the reforms. For 1995–96, we have reduced the amount which we require to be spent in the independent sector from the 1992–93 figure to 50 per cent. That is a somewhat technical change, but it may be helpful to local authorities. Of course the condition involves the minimum necessary spending in the independent sector.
Many authorities now recognise that the future lies in becoming purchasers or brokers of care rather than providers. Indeed, many are already spending far more on independent sector services than the 85 per cent. of the transfer element of the STG that they are required to spend. They realise that services provided in that manner are often of lower cost and of higher quality. Indeed, that can be applied to all their services. The independent sector has been invaluable in raising standards of care and in increasing efficiency, yet there are still some foolish authorities that appear to retain an ideological bias against the use of that sector and would rather use their own, more expensive, provision.
Rarely a week goes by in which I do not receive representations of the sort to which my hon. Friends referred. Those foolish authorities should take note of what the Audit Commission said in its report "Taking Stock":
Costs that are unnecessarily high deny other people the care they need.
Those are very wise words.
Although the independent sector's involvement in residential care is well developed and established, its involvement in day and domiciliary care is much more patchy. To some extent, it is like the chicken and the egg. If local authorities do not invite it to tender, the independent sector cannot prove its value. We certainly wish to encourage authorities to consider making greater use of independent sector providers of day and domiciliary care. For that reason, we have asked local authorities to include in their next community care plans information on their plans to purchase independent sector domiciliary care. That will give the independent sector the information that it needs to develop its proposals in that area.

Mr. Hinchliffe: On the development of independent sector domiciliary care, does the Minister accept that one of the problems facing local authorities and one of the reasons for lack of development in that area, whatever one's view on it, is the total absence of inspection or registration arrangements? Is it not highly irresponsible of the Government actively to encourage more and more private companies and individuals to move into such a

sensitive area without at the same time legislating for similar registration and inspection arrangements as those for residential care?

Mr. Bowis: The hon. Gentleman knows, because I have told him on more than one occasion, that that is one of the issues that we shall consider in the general review and inspection during this year. He should remind the House that many voluntary registration and inspection schemes—I am sure that he has encountered them around the country—are being introduced with the good will of the independent sector, which would like its good name to be protected. Even without such schemes, local authorities have the power and, I should have thought, the duty to ensure that good-quality services are provided when placing vulnerable people in services. Surely councils already guarantee such services to people whom they place in domiciliary care. But we shall consider that in future.
Supporting people in their homes, wherever feasible and sensible, is, of course, one of the key objectives of the community care reforms. Under the old system, there was a perverse incentive for people to enter residential care whether they really needed it or not. We have removed that perverse incentive, by basing the provision of both residential and non-residential services on an assessment of need.
The assessment process is at the heart of the Government's community care policy. The assessments are "joint" assessments in the fullest sense of the word. A qualified social worker will be involved and, where necessary, so will other professional staff such as doctors and nurses. They will all have a part to play in deciding on the most appropriate services for each individual. The circumstances of carers, too, will be taken into account in deciding the outcome; so recently I was especially pleased to welcome the Carers (Recognition and Services) Bill, which should bring into statute what we have already made clear is best practice.
Last year, we provided an extra £20 million in grant to encourage the development of home and respite care. Early reports show that that has been put to good use in many parts of the country. This year, we are increasing that sum to £30 million, and I hope that that will help to support carers. I take the opportunity to pay tribute, in which I know hon. Members on both sides of the House will join, to all carers across the country. Theirs is a difficult and demanding task, both physically and emotionally.
Today, the Audit Commission published a comprehensive set of indicators that can be used to compare different authorities. They showed wide variations in the level of councils' performance. Some of the biggest variations in social services arise in the provision of respite services for carers. For example, some authorities provide 10 times more overnight breaks for carers than others do. Of course that discrepancy may reflect different ways of specialising in providing respite care, and other authorities may use alternatives, such as sitting services, but authorities certainly need to investigate the differences.
We do not propose any change this year in the distribution formula. I emphasise the fact that we have clearly shown our commitment to community care and have made substantial resources available. The report


provides for the distribution of additional funds to local authorities totalling more than £600 million for 1995–96. I commend it to the House.

Mr. David Hinchliffe: I am grateful for the opportunity to debate the special grant report. This is our only opportunity during the year to have a brief debate in Government time on community care—an issue of profound importance to many millions of people in this country.
I start by repeating the Opposition's strong support for the objectives of enabling older people and those facing physical and mental disabilities and mental illness to live their lives within the community in as normal an environment as possible. To the Labour party, community care is fundamentally a human rights issue, and we strongly support any attempts to deliver to people opportunities that have been denied to far too many people in the past.
As I have previously made clear, we have therefore offered broad general support for the Government's attempts to address the difficulties that arose directly from the previous system of paying Department of Social Security top-ups to people entering independent sector care or nursing homes. The National Health Service and Community Care Act 1990 was aimed at unravelling the serious problems that stemmed from the massive expansion of private institutional care, which resulted in many unnecessary admissions of people who should have been enabled to continue living independently.
The Minister mentioned the perverse incentive, but that incentive was a direct consequence of Government policies. The arrangements that prevailed from 1981 to 1993 provide the best possible illustration of the impact of the market on the provision of care, when the models of care offered were often more suited to the business interests of providers than to the real needs of users. The end result was the investment of £10 billion worth of public money in the expansion of private institutional care at a time when official Government policy was to develop alternatives to models that had their roots in the poor law. In short, the market has taken us backwards.
In supporting the changes introduced in the 1990 Act, the Labour party has consistently expressed concern that the implementation of the changes has been adversely affected by the Government's prime objective of protecting business interests. That objective came over loud and clear in the Minister's speech.
During the debate on 1 March last year I criticised the Government for the serious difficulties caused to local authorities because the funding distribution formula was originally geared more towards ensuring the survival of private institutional care than towards addressing known local needs. I made clear our view that the Government had badly bungled the funding arrangements, and made the proper planning of community care year on year totally impossible for local authorities.
As the Minister will recall, I predicted that, as a direct result of serious errors in implementing the care changes, a number of authorities would face severe difficulties during the 1994–95 financial year. I have taken no pleasure in being proved right as authority after authority has publicly stated its inability to meet legitimate demand for services.
Those authorities could have been identified in March last year, and in November, with four months of the financial year still to go, I established that at least 12 authorities had exhausted their special transitional grants. They had raided base budgets and shunted money from a range of other sources. Some had increased the charge for services, but often they had still been unable to meet the needs identified through care assessments.
The result, as the Minister knows, is an increasing queue of users in the courts demanding judicial reviews of their case. From Gloucestershire to Lancashire, and from Islington to Wandsworth—a Tory authority that covers the Minister's constituency—service users are taking councils to court.
I know that the Department of Health is taking a close interest in that development—as well it might, bearing in mind the prediction by the Association of Directors of Social Services that if the court rules against Gloucestershire,
Every Local Authority in the country is going to find itself challenged".
I visited Gloucestershire a few weeks ago to speak at a conference, and I had the pleasure of meeting Mr. Robert Parry, the chairman of the local carers forum, who showed me correspondence from the Minister and others in the Department expressing a belief that local authorities had been fairly funded. At the same time I met the local director of social services, Mr. Derek Mead, and I was struck by his comments on the court action in last week's edition of Community Care magazine:
The issue before the Court is what avenues are open to Local Authorities faced with a situation where there has been a cut in grants and a doubling in demands. Something somewhere has to give. We can't be told to meet people's needs whatever they are and then be given a budget which is capped".
The Minister must concede that demand for care services has exceeded all predictions. The Government have trumpeted the care changes as a new deal for users and carers, which is often not quite matched by people's experience. For political reasons their expectations have been raised, and the consequences are all too clear.
Alongside the Department of Health propaganda there are the equally important implications of the introduction of the market in health and its impact on community care. Some organisations, such as Values Into Action, have argued strongly that trust status has meant that local health policies, especially in relation to learning disability, have been in direct contradiction of the professed aims of the Government's community care policy.
In the context of the care of the elderly, the introduction of the market alongside the community care changes has been grasped by health purchasers as a heaven-sent opportunity to pass huge chunks of the traditional health role over to social services departments. When the Prime Minister said that the national health service would not be privatised while he lived and breathed, he ignored the fact that privatisation of the care of the elderly has happened both under his predecessor's Government and under his Government. In 1979 there were 55,139 care beds for the elderly in the NHS, but the number had dropped to 37,539 by 1993–94. In the same period, the number of private care beds increased from 26,095 to 134,510. If that is not privatisation, I do not know what is.
If anything, the process has quickened in recent times. The implications were rightly picked up by the ombudsman last year in respect of the actions of Leeds


health authority, but such examples have arisen across the country. The Minister will recall the survey that I published in December entitled "Passing the Buck", in which more than half the authorities that responded—some 43 councils—gave examples of cost shunting from health to social services. Cost shunting on to councils has been a major factor in the budgetary difficulties of the current financial year. I fear that it will also have a serious effect during 1995–96—the period to which the report that we are debating applies.
I know that the Minister will say that new guidelines on continuing care should deal with the difficulty, but they cannot restore to the NHS almost 20,000 elderly care beds that have gone from my constituency and many other areas. The fact that the Department of Health has failed to offer a clear national definition of the health care divide means that battles will continue over who is responsible for what.
We fear that the serious difficulties of the current year are likely to get even worse during the period to which the special grant report applies. The local authority associations predict that the current year's estimated shortfall in funding—the gap between the special transitional grant and known needs—is about £96 million, but under the next financial year's settlement set out in tonight's report it will reach £261 million. Their projections are that for 1996–97 it will reach £495 million and for 1997–98 £796 million.
We know that many councils have used base budgets and reserves this year to meet needs that could not be covered by special transitional grant.

Mr. Bowis: As the hon. Gentleman knows, the Government are putting a further amount of more than £600 million into the community care grant. He says that that is not enough. Is he committing his party, if it were in power at some time in the close future, to put in more? If so, how much?

Mr. Hinchliffe: I am repeating criticisms that have been made to me by the local authority associations. They are in the best position to assess the level of needs. I am expressing the concern that they as providers—as people who are landed with the task of administering the new system—have expressed. Councils' projections of the total gap in funding in the current year were reasonably accurate.

Mr. Bowis: The hon. Gentleman would not wish to mislead such local authorities or raise expectations unnecessarily in them, so how much would he give in addition?

Mr. Hinchliffe: I think that the Minister is aware that I regularly meet local authority colleagues from different political parties. If he will give me a few moments, I will set out the steps that I would wish to take in our approach to community care. I cannot quantify how much. As the Minister will obviously appreciate, the figures that I have mentioned are those that local authorities say are needed, where there is a gap. The gap is fairly apparent around the country in area after area. The Minister has to face the fact that his Department is directly involved in court cases. He must be aware of the problems that councils face.
The Minister is a reasonable man. He will concede that some councils have genuine difficulties in meeting the task that they have been landed with in implementing the care changes.

Mr. Bowis: The hon. Gentleman has mentioned a figure of £700 million in addition to what the Government have provided. He must either say that he would provide less than that if he was in government or that he would give that amount. If he would give that amount, I should like to have that confirmed. I should also like confirmation that it has been approved by the leader of his party and the shadow Chancellor.

Mr. Hinchliffe: The Minister should have listened to what I said a few moments ago. I said that I would expand on what my party would do. We have some important proposals to make to tackle the current crisis in community care. In particular, we would make much better use of existing resources than the Government are making with their policies, which directly impact on local authorities.
If I had been a Minister in the Department of Health between 1981 and 1993, I would have made much better use of £10 billion of public money than the Conservative Government have in respect of reinstituting the expansion of institutional care.

Mr. Ian McCartney: Perhaps I could give an example to the Minister of the colossal waste of resources. In my area, a health authority and a trust are mothballing provision in the public sector for long-term care of the elderly confused. After 14 days, the family at the side of the bed are given a letter about arrangements to go into the private sector, to be funded from the local authority's budget. This evening there are beds lying empty. Facilities that cost more than £1 million for the specific needs of the elderly confused in my area are not available as a result of the Minister's private care market and his ideology of driving the elderly into the hands of the private sector. Authorities are disbarred from using their own resources, paid for at the expense of the local authority care budgets.

Mr. Hinchliffe: My hon. Friend makes a strong point in the way that only he can. When the Minister talks of his ideology of privatisation, he uses the word "choice", but he means shunting public responsibility for care services on to the private sector. He should take responsibility for some of the problems that arise as a direct result.
I did not intend to use the letter that I have with me tonight, but I shall do so because the Minister has raised the issue of cost and because it reinforces the point made by my hon. Friend the Member for Makerfield (Mr. McCartney). I have had passed to me by the office of my right hon. Friend the Leader of the Opposition only this week a letter which I know has also been passed to the Department of Health. It is about a lady in her eighties who is currently in a care home. She faces severe difficulties because her income does not meet the care fees on a week-by-week basis. I shall be only too happy to pass the letter to the Minister.
The lady has received from a group of solicitors in Northampton a letter which says:
Should the invoice not be paid on the due date then I have been instructed to issue a county court summons forthwith.


The relative who raised the matter with my right hon. Friend ends her letter by saying:
As I complete the final draft of this letter, there has been a change in Mum's health. She is now dying. Her health has been deteriorating for the last three weeks, but particularly for the last week. I hope that we can at least make sure that others will not have to face the problems described here, but suspect that this may only be the case with a change to a caring Government policy.
Such cases are brought to my attention every week and must be brought to the Minister's attention. He talks about the move to the private sector. Such cases are the reality of the care problems that face people in the private sector.
The Minister cannot deny the problem. He can look at the correspondence. I will happily copy it to him, but I believe that his Department has it already. That is the reality facing vast numbers of constituents of both Opposition and Conservative Members throughout the country as a direct result of the privatisation of care by the Minister's Government.
I shall continue to expand the point that I was making about the financial difficulties that face local authorities. I set out the projections that local authorities have made for the effect of current policy and the problems that they face in the next three financial years. We know that many councils have used their base budgets and reserves this year to meet needs that could not be covered by the special transitional grant. The 8 per cent. increase in gross personal social services total standard spending for 1995–96 is almost wholly made up of additional funding for community care in the form of the 1995–96 grant. Local authorities believe that the settlement effectively represents a cash freeze once the effects of additional resources for new community care responsibilities have been excluded. The increase in total standard spending is £0.7 million pounds and, at 0.01 per cent., is well below the average increase of 0.8 per cent. quoted for all services.
In that context, raids on hard-pressed base budgets in 1995–1996 will simply not be an option for many councils. I read with concern the worrying projections of the Association of Directors of Social Services arising from a survey of local authorities published early this month. It showed that more than 80 per cent. of social services departments will have to reduce their services during 1995–1996. The cuts range from 0.5 per cent. to 10 per cent. with an average of £1 million per authority, although one council is cutting £12 million.
To stay within budgets, there are proposals to raise strict eligibility criteria, to increase charge levels, to put tighter ceilings on individual packages of care and to reduce investment in domiciliary care. That is the reality of the next financial year from the point of view of those at the sharp end. I recognise that there will never be sufficient resources to meet all expressions of need presented to social services, but steps could be taken to address the serious difficulties that I have described.
There are steps that the Government can take to deal with the crisis that is facing personal social services. They must, first, take account of the impact of the NHS changes in terms of local authority budgets and bring to an end the obvious buck-passing process, which has had huge resource implications for councils. In my survey, I came across the case of a person in a coma who had been passed for community care from a hospital to a local authority,

and people who were unconscious and on drips who had been referred for community care. That is what faces local authorities.
The Government must strengthen the continuing care guidelines and further protect councils from having to fund the care of people who should be the responsibility of the NHS. Only this morning, I addressed a conference of health and social services managers, councillors, chairs of health authorities and regional authority members. Their concern was that the guidelines are, frankly, meaningless.
The Government have not addressed some practical problems which are being faced at a local level. They must look at that, and ensure that the guidelines mean something. They must resolve the difficulties in terms of who does what in many local communities.
The Government must also look again at the calculations of future community care funding and its distribution. The Minister will be aware of the Association of County Councils call for research to be undertaken into the definition of the unit costs of community care service. There is a possibility of linking that with local needs identified in community care plans and other relevant information to lead to a much more satisfactory distribution of resources.
I repeat the point that I made in last year's debate and, indeed, in the previous year's debate: the Government should drop their dogmatic insistence that the bulk of the special transitional grant should be spent in what they term the independent sector. The Minister knows that there is clear evidence that that requirement is resulting in a significant number of unnecessary admissions to permanent care because independent sector domiciliary care is simply not available in many areas. That condition is wasting scarce resources, as well as resulting in a denial of an individual's rights to care within the community.
I made clear at the outset the Labour party's support for the principle of community care and our policies would take the process a good deal further, with choices for users and carers which they are denied at the moment because of the Government's market dogma. Choice for us means more than giving somebody a list of private carers.

Mr. McCartney: Will my hon. Friend ask the Minister an important question on an issue that the Minister ducked in his eulogy about Government policy? What will be the Government's position on funding if the courts decide to place on Gloucester and other local authorities a duty to fund care propositions? Will a supplementary grant be awarded by the Department? What arrangements has the Department made if, following the court ruling, local authorities have to act unlawfully or carry out the decision of the court in respect of the provision of the service?

Mr. Hinchliffe: It would be helpful if the Minister felt able to respond to that point, as he has had guidance from his officials on what response the Government might make. I am well aware that the Department of Health has been involved in the Gloucester situation, and the Department must be looking at what is happening elsewhere in the country.
In conclusion, our view of choice is somewhat different from that of the Government. To us, it means policies about the active encouragement of a continuum of care options from independent and semi-independent living to


individualised provision in permanent residential or nursing care settings. It means ensuring choice and a good quality of public sector services, as well as the voluntary sector and private provision.
We are pleased that progress has been made in community care, but a comparison of provision in Britain with that in some adjacent European countries shows that we are, frankly, light years behind. The problem is not just resources, but thinking, philosophy and attitudes. If our outlook is essentially determined by market dogma and if our central thrust is one of deregulation, we will continue to deny people the rights, freedoms and choices available to the majority. I hope that the Government will accept that our criticisms reflect what is being said to us by users and carers, and that they will respond to some of the serious points that I have made tonight.

Mr. David Rendel: I am delighted to have the opportunity of joining the other two main parties on one matter. In principle, we also fully support the idea that lies behind community care. However, the Government must recognise that, in introducing the processes of community care, they have raised expectations which have failed to be met.
The Government must do something rapidly if they wish the principle of community care to continue to meet with the widespread acceptance that it had before it was introduced in practice. Community care has been widely accepted and implemented successfully in a number of counties. Interestingly, one may exclude Buckinghamshire from that number, and we all know that there are severe difficulties in the community care processes there.
Community care procedures were always bound to cost more than the previous procedures, and the Government let themselves down in not recognising that. Too little money has been allocated year after year for the proper implementation of those procedures and, sadly, that includes the budgets that are about to be set for 1995–1996.

Mr. Bowis: Before the hon. Gentleman moves on, let me make a point which I know he would wish to answer. He is saying that inadequate funds have been allowed to resource community care. The additional special transitional grants which we are talking about today were, in the first year, £565 million, in the second year £1.2 billion and in the third year £1.8 billion. The total will rise to £2.2 billion in the fourth year. What figures would the hon. Gentleman put on it?

Mr. Rendel: I am not pretending that I can put a precise figure on that now. The principle was correct, but we must find the right amount of funding to make sure that that principle works in practice. It is up to the Government to make sure that those sums are met out of their finances. I have no doubt that, before the next general election, all of the parties will provide a proper menu with prices for all of the policies that they intend to implement in the new Government. My party will do that, and I hope that other two main parties will as well. They have not always done so successfully.
A number of problems are associated with the financing of community care. The first is a severe problem that has already been mentioned—it is clear that some services that were dealt with within the national health service have been transferred to the community care service without the equivalent funding being transferred along with them. That problem is causing difficulties for the elderly—a particularly vulnerable portion of our population.
The second problem is the way in which funding has been switched. Some £80 million was taken away from funding for the shire counties and provided for the metropolitan authorities, That has caused immense problems for counties such as Devon, Gloucestershire and the Isle of Wight. Numerous hon. Members who represent those areas have already mentioned those problems. It is important that we recognise that that switch caused a certain amount of chaos during the early implementation of community care.

Mr. Bowis: I happened to look at the figures for the hon. Gentleman's county of Berkshire and noticed that, as a result of that change, it received £800,000 more than it expected, in addition to the £1.6 million more than it had expected from the standard spending assessment review. Has the county had difficulty managing that additional income under his party's control?

Mr. Rendel: Sadly, Berkshire is under joint control, not under the control of my party. I wish that it were, but perhaps that will come about soon, as I understand that there is a good chance that some Conservative members of Berkshire council may be about to resign the Whip. Perhaps we shall take control rather sooner than the Minister might think.
My argument was not about Berkshire, but about shire counties in general. Some have done rather better than others. The point is that the switching of resources in such a sudden and unexpected manner throws procedures into difficulties. The shire counties that lost out not unnaturally found it very difficult to provide the community care resources necessary under the Government's new system.
I visited Devon recently and talked to some owners of private homes there. The switch has hit them hard. If there is a lack of resources and the money has to go to publicly funded homes—it would only cost more to shut them down in a hurry—that inevitably causes the private home owners difficulties, as they are without the clients whom they had expected, or without clients who have the funds to pay for their accommodation. The Government must recognise that, in many cases, they have caused problems for the private home owners. If those owners are squealing, perhaps they should turn to the Government.

Mr. McCartney: Will the hon. Gentleman ask the Minister about overcapacity in the private sector? If I remember rightly, when the Government introduced the changes, they said that there was 40 per cent. overcapacity in the private sector, which they could not fund. That has led not merely to failure to win contracts—when those are available—but to the cost of repaying loans for refurbishment, or the capital cost of new builds, settling on private home owners. They are having to meet the bills for the capital that the Government encouraged them to borrow, with no income because of overcapacity in the market. They are unable to fund the loans by gaining contracts to care for the elderly. Should the Government


not give some estimate of the number of private sector homes for the elderly that will have to close because of overcapacity?

Mr. Rendel: I thank the hon. Gentleman for that intervention. It would indeed be interesting to hear the Government's response. Perhaps the Minister will reply when he sums up.
The third problem that has arisen is that, under the Government's new system of assessing the needs of all those who require community care, we are moving towards a system based on need. The Government said so at the time and were right to do so. If one has a system that is based on need, however, one must provide the funding for it, or people will feel let down.
The fourth problem is the fact that local authorities have been forced to spend such a large proportion of their funding on the private sector. Interestingly, the arguments against have focused on choice and on the fact that funding must go into public sector provision because it is there now. One argument that we have not heard is whether there are hidden costs to local authorities when they move the provision of services from the public to the private sector.
The House will no doubt know that the Equal Opportunities Commission produced an interesting report on compulsory competitive tendering today, which apparently shows that the hidden costs have been roughly twice the size of any expected savings. It is clear to all of us who have been involved in local government that, while there are superficial savings in some cases, CCT often costs local authorities a great deal of money because of hidden costs, which are not necessarily obvious from their accounts but are nevertheless very real. The way in which the Government are forcing community care into the private sector may well result in hidden costs that they have failed to recognise. The costs are part of the reason why funds are insufficient to meet the needs of people in community care.
It is cruel of the Government, when assessing their needs, to raise the hopes of those who need community care, only to dash them by failing to produce the necessary funding. They are some of the most vulnerable members of our community—the very old, the very sick and people with severe disabilities. They cannot be expected to look after themselves and their own needs. The Government have played a cruel trick on them by introducing the community care system and raising their hopes, only to dash them because community care is not working as we all hoped that it would. The Government must fund the necessary community care resources in line with the identified need of the people concerned.

Ms Ann Coffey: I was astounded to read in the Audit Commission report that came out today that a very low number of elderly people in Stockport, of all the metropolitan authorities, are in residential care and being provided with care in their own homes. I found it difficult to understand because Stockport social services department spends well above the standard spending assessment. It suddenly dawned on me that the problem with the Audit Commission's figures is that many elderly people in Stockport are in nursing homes and, therefore, would not come under the category of residential care. They are in nursing homes as a result of the joint policy

of the local authority and the local health authority for social services to be a health provider. The figures are misleading.
The difficulty when one receives an Audit Commission report is that one has to spend a considerable amount of time puzzling out what the statistics mean. If such reports continue to be published, I think that we shall find fewer people in residential homes in Stockport because one of the impacts of joint commissioning by the health authority and social services departments is that purchasing is targeted at those in greatest need. Residential care will inevitably be provided through the nursing sector because the people in greatest need will have health needs that can be provided only through nursing homes.
The Audit Commission provided an indication, not of the performance of a local authority, but of the purchasing trend because of the level of nursing and the health needs of elderly people. It showed how local authorities are turning into health purchasers.
I become disappointed when I hear the Minister talk about community care. Although he constantly says that the Opposition are guilty of the maxim that private is bad and public is good, he is guilty of always assuming that public care is bad, private care is good, and the only way to improve public care is to introduce a market mechanism. Essentially, that is what community care is about.
I sat as a councillor on a social services committee when we were deciding what to do with our residential homes because of standards being set by the Department of Health to improve the physical environment and the space to which people were entitled. Those standards were all good and proper, but the council was not allowed to borrow money to improve standards in the public sector. The council closed a number of residential homes because it did not have the money to improve standards. There was no fair playing field between the public and private sectors, as the private sector had access to capital borrowing and could therefore provide private homes to the standards set by the Department of Health, and the local authority ended up purchasing places in private homes. We all felt that it was a bit of a rigged market, which had more to do with the Government's ideology than with a genuine attempt at a partnership between the public and private sectors, which we would all welcome.
The Minister said that local authorities' responsibilities go beyond spending the community care grant. We understand that. May I illustrate the problem by explaining the position in Stockport? Stockport is a capped authority, and since the disaster of the poll tax, the proportion of Government grant to money raised by the council has increased enormously. Some 80 per cent. of the council's income is Government grant, so the Government have a stranglehold on the council's resources. Inevitably, that affects the council's spending and how it decides between priorities. For example, the Government's failure to fund the teachers' pay increase has meant that it has had to be funded from elsewhere in the budget. [Interruption.] I am sorry, Minister, but it is not rubbish.

Mr. Bowis: I did not say that it was.

Ms Coffey: Part of those funds are being taken from money that should be spent on community care. The council is unable to provide home helps, which are part of community care. In my authority, like all authorities,


the problem with the home help service is that it has been targeted at those in greatest need. Although people in greatest need require home helps, those in a little less need have no access to home helps because the council cannot provide home helps for them all. Effectively, therefore, the community care infrastructure is not preventive but targeted at those in greatest need. That is fine, but it creates problems.
A core issue in respect of community care is enabling people who live in their own homes and who become disabled or elderly-infirm to climb the stairs to the bathroom. Installing chair lifts in private housing is a big problem because the money comes from the urban renewal grant, so the application competes with applications for mandatory grants to renovate houses. If the council wants to make more money available for installing chair lifts, it must come from other budgets. If no chair lifts are available, elderly-infirm and disabled people cannot stay in their own homes and we therefore do not have the community care or choice which the Government talk about.
So let us not pretend that there are not enormous problems. I hear the Minister talk about the money which the Government give local authorities, and it seems like a lot of money. But when I see my constituents' problems, all I can say to the Minister is that, although it may seem like a lot of money, it is not sufficient to finance the community care procedures that the Government have introduced. The measure of the scheme's success must be whether community care can be delivered. My experience, and that of all my hon. Friends, is that it cannot. Local authorities are being turned into health purchasers to save the health authority budget. That was not the original intention of community care, which was essentially to provide a community infrastructure for people to stay in their own homes, not to buy privately the health care that should be provided through the national health service.
In case the Minister thinks that my view is unbalanced, may I raise a problem about which I have corresponded with him on behalf of private home owners? If elderly people who were admitted to a private home before 1993 and funded their place themselves now run out of money, they cannot be funded through the community care grant. They may receive a DSS grant but that will be less than the purchasing price within the private home. For elderly people to receive funding from the community care grant, they must leave that home. They cannot go into another home managed by the same organisation but must find a home managed by another organisation.

Mr. Hinchliffe: May I reinforce my hon. Friend's concerns? I discovered from a parliamentary answer recently that 78,500 people come into the category that she describes. It is a serious problem and I hope that the Minister will deal with it.

Ms Coffey: I thank my hon. Friend for that supportive comment.
As I was saying, elderly people who run out of funds must be evicted from a home in which they may have been living for five or six years, but if they go to a private home run by a different organisation, they will be funded out of community care money. Where is the sense in that? How does that care for elderly people? I understand that the legislation was framed to prevent abuse by private

home owners, but its only effect has been to abuse elderly people. As the Minister knows, moving elderly people from one home to another puts them at risk—

Mr. Hinchliffe: It kills them.

Ms Coffey: As my hon. Friend said, it effectively kills them. I have corresponded with the Minister's Department about that matter but have not received an answer, so I am pleased for an opportunity to raise it in this debate.
We shall have no sensible idea of what community care funding is about until we resolve the problem of the respective purchasing roles of health authorities and local authorities for the health needs of elderly people. Although a recent Government circular told authorities that they must come up with a number of continuing care beds for elderly people and an appeal process will be put into operation, that issue is by far unresolved. The problem with the community care grant is that much of the money is, of necessity, being used to buy health care because the national health service has decided to give up caring for elderly people as that produces no profit.

Mr. John Gunnell: I have only a minuscule amount of time to speak, so I suggest that the Minister and I meet to discuss some of the issues.
I was part of the Audit Commission when it drew up its original report on community care. Although progress has been made, two matters are causing great difficulty and a third is now on the horizon. They need to be tackled. In some cases, they show a departure from what the Audit Commission originally envisaged.
First, obviously many authorities find that there is not enough money. The figure for Leeds appears generous if one compares it with other figures in the table, but Leeds is £3 million short of the money that it expected to receive. That is bound to have an impact on community care. For example, when reductions are made in the total budget, there is an increase in vacancies for social workers. That makes the assessment process much more difficult. Therefore, considerable difficulties result from a shortfall of funding. It is not a generous settlement, and it should not be considered generous.
Secondly, grave difficulties result from the restriction of 85 per cent. going to the independent sector. I am not dogmatic about those issues. Yesterday, I met people from my constituency who run homes for Registered Residential Care Homes. They expressed their anxieties about some of the other private care homes in the city which were not registered. They felt that I should inquire about them, and especially that I should examine whether people in those homes had control of their pocket money. They felt that control of pocket money added to people's status and their sense of having a little independence. They said that that happened in their organisation, but that some other organisations, for commercial reasons, took all the money at the start and allowed individuals little freedom to choose the way in which they used any of it. Anxieties about the quality and actions of some care homes were therefore expressed to me by other private care homes yesterday.
The third factor, which must be considered in future, is the likely impact of the Government's pronouncements about long-term care coming as a direct result of the


Leeds case mentioned by my hon. Friend the Member for Wakefield (Mr. Hinchliffe). Obviously, in this country that will be a critical issue for the future.
When I lived in the United States, I found that people spoke about the American dream, but they also spoke about the American nightmare. The American nightmare was that all one's resources would be spent and used up on health care in one's old age, and that one would then be forced to rely entirely on a welfare system which, in the United States, is very poorly developed.
We are approaching a position in this country in which many elderly people realise that any long-term sense of security is being taken away from them by Government. They now know that, if they have specific afflictions that the health service says will not improve, they may be off into a private home and their original homes will have to be sold to pay for their upkeep. In that way, the American nightmare is coming to this country, and it is a cause of grave concern.
I do not know whether the Minister has met many local authorities which have difficulty meeting their community care budgets, but I should like the opportunity to have a proper discussion about some of the issues that I mentioned, which cannot be discussed properly in a short debate.

Mr. Hinchliffe: With the leave of the House, I wish to make one or two brief arguments in summary.
The hon. Member for Newbury (Mr. Rendel) made some important arguments in his contribution about the over-concentration on private provision of institutional care; fair arguments that apply, not only to Berkshire, but elsewhere in the country.
My hon. Friend the Member for Stockport (Ms Coffey) made the important argument that local authorities are now health purchasers. That is a simple fact. Five or 10 years ago, they would certainly not have dealt with the type of cases with which they now deal. They are now health purchasers, but they are not funded as health purchasers. The Government must tackle that.
My hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell) reinforced that argument by describing the impact of problems with long-term care. I am worried that the Minister's line has consistently been that local authorities should be able to manage. He believes that bad management is at the root of the problems faced by some of them.
I was very conscious of the remarks of Mr. Peter Stock of the National Users and Carers Group, who has written to the Secretary of State for Health, complaining that her Department's press release on an issue had manipulated the facts. I quote from Community Care of 9 March 1995. Mr. Stock said:
The document, which concentrated on remarks by John Bowis that a few councils were unable to resource their community care programmes because of bad management, did not reflect the group's views and had prompted him to consider resigning.
That is the users and carers group, which says that arguments about bad management simply do not wash. It is not the issue. Is it any wonder that directors, according to the same magazine, are outraged by Bowis's attitude to cuts? [Interruption.] Directors of social services are outraged; perfectly reasonable people, as the Minister well knows, are outraged by his attitude.
I say seriously that the Minister should recognise the very real difficulties that are arising in several areas. He must recognise that it is not about bad management. He should tackle a range of issues that cause worry and seriously affect users and carers in many parts of the country. I hope that he has listened to the constructive arguments that have been made from the Opposition Benches. I hope that he will respond to those arguments and consider some of those issues seriously.

Mr. Bowis: Despite the attempt at a private assignation by the hon. Member for Morley and Leeds, South (Mr. Gunnell), the debate has nothing to do with OutRage!
I welcome the general support that has been given from both sides of the House for the policy of community care. That was emphasised at the beginning by the hon. Member for Wakefield (Mr. Hinchliffe) for the Labour party and by the hon. Member for Newbury (Mr. Rendel) for the Liberal Democrat party. I think that similar support was expressed by almost everyone who has contributed to the debate. I very much welcome that.
It would be wrong—and I do not intend to do so—to refer to any of the matters that may be before the courts now or shortly, so the House will understand why I shall not follow one or two hon. Members down that path.
We have heard references to cost shunting, and to the guidance that we issued, to which I referred in my opening remarks about continuing care. Despite the conference that the hon. Member for Wakefield may have attended this morning, I have to say that those guidelines have been very much welcomed by those who manage social and health care—by the Association of Directors of Social Services, by the National Association of Health Authorities and Trusts, by the British Geriatrics Society and by those representing the carers and users, the National Care Homes Association. We have therefore made good progress in that.
We have heard reference to preserved rights cases. They are nothing to do with the report. That is a matter largely for my right hon. Friend the Secretary of State for Social Security, but at the time the House—and I do not recall the Opposition objecting—gave the people who were resident in the independent sector at that time that special degree of security by giving them preserved rights. They did not have to go through the assessment procedures. They retained their rights to income support for as long as they needed it.
The hon. Member for Stockport (Ms Coffey) made an argument about the additional safety net that we put in, which was not there before. That ensured that, if someone who was in a residential care home in the independent sector ran out of resources, the social services would have the power to pick up the case. As the hon. Lady well understands, the reason for the requirement that it not be in the same home was to remove any perverse incentive for any home to increase the rates to meet a top-up that was there. The actual rates are not a matter for the debate.
We have heard a great deal from Opposition Members of what I can only describe as hostility to the independent sector. We hear it again and again throughout the country. Conservative Members want quality and the best use of resources. Resources have been central to the debate.
I have to say to the hon. Member who mentioned Devon that, in 1990–91, Devon received £63 million for its social services; in the coming year it will receive £135 million. I think that Devon can manage as long as it uses those resources well and efficiently; that was the message of the Audit Commission. The Audit Commission says that it has started well and that often, where problems exist, better financial control and better use of the independent sector are needed. The Audit Commission has also highlighted £500 million that could be spent on front-line services if local government managed its pay bills better. We have heard much from the Labour and Liberal parties tonight about resources and reference has been made to £700 million. But when I asked both parties to put on the table their pledge for more money in addition to what the Government spend and are prepared to spend, there was not a word. They will not give promises of additional resources; they merely engage in a political tease with people who are trying, responsibly, to use the generous resources that have been given for community care.
The report provides £647.6 million—real money and real resources. There is to be £5.1 billion for community care in the coming year and for personal social services a fraction under £7 billion. Those are fair resources and I look forward to working with the responsible leaders and directors of social services—the vast majority—up and down the country. I commend the report to the House.

Question put and agreed to.

Resolved,
That the Special Grant Report (No. 13) (House of Commons Paper No. 286), which was laid before this House on 13th March, be approved.—[Mr. Kirkhope.]

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.),

RATING AND VALUATION

That the draft Railtrack PLC (Rateable Values) (Scotland) Order 1995, which was laid before this House on 8th March, be approved.
That the draft British Railways Board (Rateable Values) (Scotland) Order 1995, which was laid before this House on 8th March, be approved.
That the draft Electricity Supply Industry (Rateable Values) (Amendment) Order 1995, which was laid before this House on 9th March, be approved. To be decided forthwith, pursuant to Standing Order No. 101(5).
That the draft Non-Domestic Rating (Chargeable Amounts) (Amendment) Regulations 1995, which were laid before this House on 21st March, be approved.—[Mr. Kirkhope.]

Question agreed to.

SCOTTISH GRAND COMMITTEE

Motion made, and Question put forthwith pursuant to Standing Order No. 94H(1) (Scottish Grand Committee (sittings)),
That the Scottish Grand Committee shall meet:

1. on Wednesday 3rd May at half-past Ten o'clock to consider a substantive Motion for the Adjournment of the Committee;
2. on Wednesday 17th May at half-past Ten o'clock to consider a substantive Motion for the Adjournment of the Committee;
3. on Wednesday 14th June at half-past Ten o'clock to take Questions for oral answer and to consider a substantive Motion for the Adjournment of the Committee;
4. in the Aberdeen Town and County Hall on Monday 26th June at half-past Ten o'clock to consider a substantive Motion for the Adjournment of the Committee.—[Mr. Kirkhope.]

Question agreed to.

Tourism

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Burns.]

The Secretary of State for National Heritage (Mr. Stephen Dorrell): I welcome the fact that we have a debate this evening on a key British economic interest—a sector that employs large numbers of people and represents an important source of wealth to this country.
I shall begin by giving a few key facts to set the tourist sector in context. It accounts for £33 billion of expenditure in the British economy—about 5 per cent. of our national income. It employs 1.5 million people and, perhaps even more importantly, the number of people employed in the tourist sector has grown by 25 per cent. in the past decade. That is why the tourist sector is part of the answer to the question: where will the jobs of the future come from?
We all know that, as an economy changes, employment in some sectors declines, and in other sectors it grows. The tourist sector is, overwhelmingly, one of growing employment and wealth creation opportunities. It is important to this country's economic interests and our constituents' job prospects for us to provide circumstances in Britain in which the tourist sector can grow strongly.
There are other important aspects of tourism. It is an industry that is geographically widely spread. It does not lead to great concentrations of people away from rural communities, small towns and provincial communities. It allows people to live where they want, and provides jobs in those communities without requiring people to move to places where they might not otherwise choose to live. The fact that the industry has a wide geographic spread is important.
The industry also provides attractive opportunities for the growth of small and family businesses. The success of the tourist sector over the past 25 years has been built on the success of small and family-owned businesses. It allows small business men and entrepreneurs the opportunity to build their own economic future through their own efforts.
As Secretary of State for National Heritage, I have a particular reason to attach importance to the tourist sector. Not only is it an important wealth-creating sector in its own right: it is also a key means of providing support to the national heritage, to the creative arts and to sporting activities in Britain. We in this country will increasingly be able to channel resources into our built heritage, theatres and museums. The tourist sector forms part of the answer to the question: where will the resources be found to develop those activities?
London's theatreland is the biggest concentration of English-speaking theatres to be found anywhere in the world. It is built on the number of visitors who buy theatre tickets in London. The pattern of sale shows that 60 per cent. of the tickets sold for London theatres are sold to people who do not live in London. Some visitors come from overseas to buy tickets for London theatres, and some come from elsewhere in the United Kingdom. That is a good example of how the interests of national heritage are reinforced by the tourist sector, and how we are able to use tourism to expand our commitment to the heritage sector.
It was that analysis that led to the creation of the new unified Department of National Heritage after the last general election. The Prime Minister's determination to see the links between the different aspects that now constitute the Department of National Heritage formed the logic for originally establishing the Department. Visitors are part of the support mechanism for theatres, museums, sport and the wide range of activities that are gathered together under the Department of National Heritage.
It is because I regard tourism as one of my key responsibilities and one of the key means of underwriting the development of, and delivering growth in, sport, the built heritage and the creative arts, that I have, since becoming Secretary of State, attached so much importance to the development of the Department's sponsorship function in relation to tourism. I want to dwell on my concept of sponsorship of tourism and the reasons why I attach so much importance to developing that aspect of my Department's work.
The House will be aware of the work that my right hon. Friend the President of the Board of Trade has done in the Department of Trade and Industry. He has worked to develop the Department's sponsorship function and to ensure that the Department understands the sectors for which it is responsible. He has worked to ensure that the Department acts as an ambassador and friend in Government and, more generally, in the industrial sectors for which it accepts a sponsorship responsibility.
In exactly the same way, responsibility for tourism falls on the Department of National Heritage. For that reason I have established a specific division in my Department charged with the development of a sponsorship function for the tourist industry. That is why we have made it clear that we wish to attract secondees from the industry into the Department, to ensure that we are properly informed about the concerns and up-to-date developments within that key industrial sector.
An important part of a Department of State's function, when it accepts a sponsorship role for a sector of the economy, is to ensure that Government accurately understand how development is driven within that industrial sector. When the Government make decisions about a sector, both the industry and the Government have their own reasons for attaching importance to ensuring that the Government understand and are well informed about what is happening in that sector.
Too often, repeatedly, through long periods of our history, Governments have been inadequately informed about what is happening in a specific economic sector. My right hon. Friend the President of the Board of Trade has set out to remedy that problem in the sectors for which his Department accepts sponsorship responsibility. I am setting out, in the Department of National Heritage, to remedy that problem as it relates to tourism, for which my Department accepts sponsorship responsibility.

Mr. David Harris: My right hon. Friend says that he wants to know what is going on in the industry—presumably that covers the industry's concerns. Is he aware of the great concern in the south-west of England about the effects of revaluation of hotels, and particularly caravan and holiday parks? I am sure that that subject will be raised during tonight's debate.
Is my right hon. Friend aware of that concern and, if so, what representations is he making to his right hon. and learned Friend the Chancellor of the Exchequer who has


responsibility for local valuation officers? The proposal is causing dismay in some sectors of the tourism industry, particularly in Cornwall.

Mr. Dorrell: My hon. Friend is quite correct to raise that point. I am well aware of the concern, particularly as it relates to the revaluation of caravan parks. The revaluation of hotels is part of a much broader issue involving the effect of revaluation under the unified business rates system. No element of that system relates specifically to hotels, but concern is certainly concentrated around the question of caravan parks.
I hope that my hon. Friend will forgive me if I do not answer directly his question about what representations I am making within the Government on the subject. I am old-fashioned enough to think that such matters are bound by the rules of collective responsibility. However, I assure him that I am well aware of the present concerns, particularly those of caravan park operators.

Mr. Robert Maclennan: Has the Secretary of State's understanding of the industry's predicament been enhanced by the report of the British Tourist Authority and the English tourist board that the Government's proposals for the privatisation of British Rail have evoked more widespread concern in the tourism industry than any other issue about which they have surveyed?

Mr. Dorrell: That view has been expressed by a large number of people. I would expect that anyone who is interested in the future of British tourism would want to see our railway system—indeed, our entire public transport network—develop in order to meet the demands of would-be travellers more effectively.
I have never understood how people can say in one breath that the railway system does not meet the needs of the travelling public, and in the next argue in favour of preserving the management system that has brought about that much-criticised state of affairs. Privatisation will improve the quality of the railway system and ensure that it matches passenger aspirations more effectively than it has done in the past.

Mr. Chris Smith: How can we match the aspirations of passengers who wish to travel on the sleeper from London to Fort William, when the train will no longer run after the end of May?

Mr. Dorrell: The key question is surely not whether it is absolutely essential to continue to provide a sleeper service which almost nobody uses, but how to ensure that those who want to travel from London to the north of Scotland can do so with maximum convenience. The evidence suggests that not enough people wish to take the journey to which the hon. Member attaches great importance, so it is not a reasonable economic proposition to continue to provide that service.
The hon. Gentleman should answer one question: if he wishes to continue to underwrite a service that the travelling public do not use, how does he defend that decision to those members of the travelling public who wish to use another service but who find that the resources

that might otherwise be devoted to improving their service are being diverted to a service that the travelling public obviously do not want to use?

Mr. John Cummings: Why does the Secretary of State assume that London must be the gateway to the regions? Why should not Newcastle, Manchester, Glasgow, Edinburgh or Prestwick be the gateway to London? Is the Minister aware that it is cheaper to travel on a return train ticket from Newcastle, Edinburgh or Glasgow to London than it is to travel to those centres from London? Why is the emphasis on London and not on the regions?

Mr. Dorrell: I was beginning to get concerned that my speech was being distracted to a debate about railway privatisation. However, the hon. Member for Easington (Mr. Cummings) conveniently takes me to my next point. By developing the sponsorship function for tourism, I can champion the interests of that industry within the Government.
The Department of Transport also deals with tourism. In alluding to that Department, I was going to refer first to the Secretary of State for Transport's announcement today about tourist signs, but I will deal with that in a moment. The second point that I intended to make concerning the Department's responsibilities is precisely the one that the hon. Gentleman has raised.
In autumn last year, the Secretary of State for Transport announced the liberalisation of air transport. That means that, instead of flying directly to London—which was the usual route in the past—transatlantic flights can fly to Newcastle, Birmingham and Manchester on a liberalised basis. That avoids forcing people to fly to London when they wish to travel to Newcastle, Birmingham, Manchester or Glasgow.
The hon. Gentleman is quite wrong in assuming that I see London as the only gateway for tourists into the United Kingdom. Not only do I think that that is untrue, but the Government have taken action to reverse the prevailing situation whereby people are forced to come to London when they wish to go somewhere else.

Mr. Hugh Bayley: I will resist the temptation to take up the right hon. Gentleman's points about rail privatisation, other than to say that the latest report from the British Tourist Authority contains a feature article with a photo and a caption which reads "Rail privatisation could hit overseas visitors". If it is clear to the Secretary of State that rail privatisation will benefit tourism, I am surprised that it is not also clear to the BTA.
On the issue of airports, will the promotion of the transatlantic trade stress the environmental advantages of using northern airports on transatlantic routes? Every plane that travels from London to the east coast of the United States flies directly over Liverpool and Manchester and, by using those airports, it would save 400 miles worth of fuel on the round trip.
Even those people who wish to travel to London, perhaps for a business conference, should be urged to fly to Manchester, spend a weekend in the lake district,


Blackpool or the north as a tourist, and then catch the fast rail service to London. Surely that should be the way to promote Britain.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I remind the House—although it should not be necessary to do so—that interventions are supposed to be brief and to the point; they should not be mini-speeches.

Mr. Dorrell: It is a fairly basic rule that, if one wants to expand a business opportunity—as I have said I wish to expand the tourism business opportunity—one must ensure that one meets the demands of one's customers. If people wish to travel to the regions of Britain to enjoy the Lake District or the city of York, I want to make it as easy as possible for them to get there. If they wish to travel to London, I want to make it easy for them to get there as well. I certainly do not wish to introduce a planning principle which requires them to land at Manchester and board a train.

Mr. Harold Elletson: Before the Secretary of State moves on, will he join me and my hon. Friend the Member for Blackpool, South (Mr. Hawkins) in recommending to the Department of Transport that it make it slightly easier for visitors to reach Blackpool in the summer season? The M6 is currently chock-a-block with motorway cones as part of a road-mending programme which apparently will continue until August—despite the fact that it has been going on for at least a year. Will the Secretary of State join me in telephoning the cones hotline to suggest that it might have overlooked that problem?

Mr. Dorrell: As a regular visitor to the north of Britain via the M6, I empathise with the plea by my hon. Friend about the cones on the M6. The M6 maintenance programme will ensure that that motorway is able to offer a high-quality service to users in the future.

Mr. Tom Pendry: It is a bit late.

Mr. Dorrell: Quite a lot of the backlog of motorway maintenance was built up between 1974 and 1979, when the hon. Gentleman's party was responsible for it. I am sure that my right hon. Friend the Secretary of State for Transport will plan the motorway maintenance programme to ensure maximum quality of motorway service when tourists are travelling to the north-west of Britain for their summer holidays. I am sure that my hon. Friend will want to take every opportunity to encourage them to do just that.
Before I leave the Department of Transport, I want to draw the attention of the House to the fruit of the sponsorship process—the announcement by my right hon. Friend the Secretary of State for Transport about the liberalisation of tourist signposting. It is the result of a substantial amount of work by my hon. Friend the Under-Secretary who is responsible for deregulation within the Department of National Heritage, in pursuing the Department of Transport and making sure that that Department is aware of the interest throughout the tourist sector in improving signposting so that people are aware of tourist opportunities within Britain.
My right hon. Friend the Secretary of State for Transport has today announced that there is to be a brief consultation on the details of liberalisation, but once those

details have been decided, we shall widen eligibility for white-on-brown tourist signs and extend tourist signposting to hotels and restaurants, so that, as is the case in many countries on the continent, tourists will be able to rely on signposting not just to attractions, but to hotels and restaurants.
I hope that the House will welcome the liberalisation of rules that have become overly strict, with the effect of restraining the growth of a key sector. That is part of what sponsorship is about.

Mr. Nick Hawkins: Before my right hon. Friend leaves the welcome news about signs, will he work with my hon. Friend the Under-Secretary to liaise not only with the Department of Transport but with local authorities? There have been problems when local authorities restrict sensible signposting such as the proposed sign to wonderful Blackpool pleasure beach, which my right hon. Friend enjoyed only two weeks ago in the company of my hon. Friend the Member for Blackpool, North (Mr. Elletson) and myself. The new road that is about to be opened by Lancashire county council with Government money apparently will not have a sign, even though it will be the most direct route. I hope that my hon. Friend will get rid of that silly regulatory approach.

Mr. Dorrell: My hon. Friend is right to draw attention to that, and to stress the importance of liberalising the rules operated by the Department of Transport and encouraging a flexible attitude from local authorities. We shall be doing exactly that. I hope that my hon. Friend will be able to put a picture on the side of the road drawing attention to the Blackpool pleasure beach and to the Big One. For those who enjoy the thrill of such rides, it is the highest and most thrilling to be found anywhere in the world.
I want to move on from the relationship with the Department of Transport to the slightly broader view of what I believe the Department of National Heritage can do as the sponsoring Department for tourism.
In addition to acting as the champion of the industry within the Government, the Department has a responsibility to set out the context within which the industry operates, and a clear view of what Government can do to assist the development and expansion of that key sector. That is why, six weeks ago, I published the document "Tourism—Competing with the Best", which sets out the Government's programme for the coming months in seeking to ensure that Britain takes advantage of the economic opportunities in the tourist sector.
First, the document sets out some of the issues which the tourist industry has to address. It states that our share of world tourism earnings has declined over the past 10 years, from around 6 per cent. in 1985 to about 4.5 per cent. now. We should aim to reverse that decline. Every time our share of those earnings declines, it represents a lost economic opportunity for Britain.
Secondly, having identified the fact that, although our tourist sector has been successful, it has not been as successful as other tourist sectors elsewhere in the world, the document sets out a programme of Government activity to address some of the reasons for that decline in our share of world tourist earnings.
If one asks visitors to Britain which aspects of the tourist experience in Britain they found attractive and rewarding and which aspects they found less attractive, one gets some fairly clear answers.
There is concern about the quality of information available to people when they book accommodation. That is why I announced in that document that we are to review the crown classification scheme to ensure that, when people book hotel space, they have access to the best-quality information we can provide about the accommodation. The market works effectively if the information provided to it is as accurate as possible. That is the purpose of reviewing the crown classification scheme.
The document also sets out the Government's commitment to fund a benchmarking project in the accommodation sector, to try to generalise good experience and good practice in the management of high-quality tourist accommodation. We shall be working in partnership with the CBI, which is concentrating on the larger end of the accommodation market while the Government concentrate on the smaller end. We are picking up on the experience of my right hon. Friend the President of the Board of Trade in seeking to generalise good practice in the efficient management of that type of business.
The third project set out in "Tourism—Competing with the Best" is a commitment to improve the performance of our overseas marketing. We shall be working with the British Tourist Authority to ensure that we continually apply rigorous tests on the value for money of our advertising promotions overseas through the BTA. The BTA will be seeking to ensure that its own work is subject to keen value-for-money testing, and we shall seek where we can to mobilise private money in support of the promotion programmes of the BTA.
The fourth project in the document involves the additional £2 million of Government money, backed by £2 million from the BTA, totalling £4 million of Government money over the next two years, to promote London as a tourist destination and to draw it to the attention of the world tourist markets. That is not to cut across the point I made in reply to the hon. Member for Easington (Mr. Cummings).
I make no apology for my view that we should be seeking to attract more visitors to London. London is one of the world's arts centres. It has more to offer the visitor than any other city anywhere in the world. It is an exciting place to visit, and offers a breadth of tourist experience that has no match anywhere in the world, and we shall he seeking to promote that around the world.
Finally, the document sets out our commitment to improve the accessibility of British holidays by improving the booking mechanisms and trying to address the concern we often hear expressed that it is easier to go into a travel agent on a high street and book a weekend or a holiday on the other side of the English channel than in Britain.
I make no pretence—indeed, I make a virtue of the fact—that the document is not an all-embracing plan for the tourist sector. I have made it clear in my introduction that I do not aspire to be—and it would be quite wrong for me to do so—chief executive of British Tourism plc. My job as Minister in charge of the sponsoring

Department for the tourist sector is to create circumstances in Britain that are as favourable as I can make them for the continued growth of the industry, and for our share of world tourist earnings to grow again.
That is the objective we set. As a sponsoring Department, we do that, first, by ensuring that we properly understand the dynamic of the industry; secondly, by ensuring that the Government use the opportunities that are open to them to improve the conditions for the industry; and thirdly and most importantly, by recognising that the growth of the industry will be provided by the private sector entrepreneurs, the people who have made it the successful industry it already is and who can make it more successful still if the Government provide them with the right circumstances.

Mr. Chris Smith: I agree entirely with the Secretary of State about the enormous importance of tourism to our economy. I have to say, however, that he and the Government are betraying too much complacency and self-congratulation about the current condition of that sector of our economy. The reality is that the United Kingdom is losing its global market share of international tourism.
In the decade from 1983 to 1993 world tourism grew by 13.4 per cent. per annum; United Kingdom tourism grew by only 11.9 per cent. per annum. Although of course growth is welcome, the Secretary of State should not be complacent about the fact that tourism in the rest of world is growing faster than tourism here. Britain has a £3.5 billion deficit in its tourism balance of payments. That, of course, contrasts with Britain's surplus in its tourism balance of payments when the Conservatives took office in 1979. Had Britain retained its share of the world tourism market over the past decade, nearly 200,000 additional jobs would have been created in that period.
Tourism is, of course, important. It is our third largest industry. It is our fourth largest source of export revenue. It employs directly and indirectly, as the Secretary of State pointed out, 1.5 million people. There is concern about what is happening, and that was demonstrated by the director-general of the Confederation of British Industry only three days ago, when he told a conference in Cardiff:
A decade ago, 55 per cent. of holiday spending was at home. Today this has fallen to 45 per cent. and is still falling. The result is a balance of payments deficit in tourism".
He continued:
We are falling behind established industries"—
tourism—
in Europe.
That is the verdict not of the Labour party but of the director-general of the CBI.
It is also important to remember that tourism is not only vital for our economy as a whole but crucial for communities up and down the country. For particular towns, cities, resorts and areas, tourism is undoubtedly a major source of employment, and it becomes doubly important for people living in those locations.
What has the Government's response been to the loss of global market share? Over the past three years, funding to the English tourist board has been cut by some 33 per cent. We have been told by the Secretary of State, on several occasions, that he has gallantly made available an extra £2 million for tourism in London. That more or less


matches the extra amount that the British Tourist Authority now has to spend abroad because of the decline in the value of sterling over the past two years, so £2 million is not enormously generous.
Then, of course, we have the time bomb that the Chancellor released in his Budget in November—the imposition of VAT on recreational transport. It is estimated that the total cost to tourism will be some £45 million per year. The increased cost to the people who run Alton Towers will run into seven figures.

Mr. Hawkins: Is the hon. Gentleman aware that it has been made clear, in subsequent statements on the original Budget statement, that a recreational transport facility such as a preserved steam railway—I declare my interest as an honorary unpaid consultant to the Association of Independent Railways—that has a route running from A to B is exempt? Even some of the lines in pleasure parks—for example, Blackpool pleasure beach, which I have already mentioned—may be exempt if they run a sufficient distance.

Mr. Smith: That may help in a limited number of cases, but it does not remove the basic problem, which has been clearly identified by people in the tourist industry. They have said that the additional cost to tourism in Britain is £45 million, so we need to take the Secretary of State's £2 million with a pinch of salt.
In terms of marketing ourselves abroad, we do not do terribly well by comparison with some other locations. I am indebted to my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry), who has been working on these issues assiduously on our behalf for many years, for pointing out that the island of Aruba in the Caribbean spends more on marketing itself in north America than does the whole of Britain. If that is the attention that we pay to the marketing needs of our tourism, perhaps it is no surprise that we are losing global market share.
Then we come to the Government's recent document "Tourism—Competing with the Best". It was trailed with considerable anticipation. As soon as it came out, I seized my copy and read it through with the expectation that it would be the answer to our problems. It would help if it were available to hon. Members in the Vote Office—it is not. It would be useful if the Department placed some copies there. The Secretary of State is guilty of the understatement of the year when he says that it is not an all-embracing document. It certainly is not. There is virtually nothing in it. It has 20 pages restating the current position, with no new proposals at all.
I am particularly concerned that the passage in the document relating to the crown classification scheme for accommodation is so weak. Yes, it says that the crown scheme has its merits and that it can be improved. Yes, it says that it is
potentially a powerful weapon to raise hotel quality".
We then learn that the English tourist board is conducting a comprehensive review. Labour Members are very clear on this: we want a statutory grading scheme for hotel accommodation. Such a scheme operates well in other countries. The Government should have been much bolder in seizing the initiative. Tourism as a whole would have greatly welcomed that. The document is deeply disappointing.
While we are on the subject of the quality of accommodation, let me remind the House that Opposition Members believe in the establishment of a national minimum wage, which would help hundreds of thousands of low-paid hotel and catering workers. On average, male employees earn £297 a week, while women earn £207 a week. The overall adult rate is £328 a week. Low pay leads to low morale, and lower-quality accommodation.

Mr. Simon Coombs: What does the hon. Gentleman think the hourly minimum wage should be—now, not at some future stage?

Mr. Smith: I will not be tempted down that path. It is the principle that is important, and it is the principle that Conservative Members have rejected. I hear them murmur that a minimum wage would put people out of business, but that has not happened in continental countries where a statutory minimum wage already exists and the quality of accommodation is better. Staff motivation is also better in those countries, and they are not losing their market share in tourism as we are.

Mr. Hugh Bayley: Four years ago, York city council established a "York tourist employer of distinction" award for employers who pay above the going rate, train staff, go for quality, innovate and provide child care. In the first year, about 10 employers signed; now, employers are clamouring to do so. Two weeks ago, I presented awards to nearly 50 York businesses that wished their high quality of employment to be recognised. None of them is concerned about a possible minimum wage, because they are paying rather more than the rate that a Labour Government would set, whatever that rate might be.

Mr. Smith: My hon. Friend has made the case very clearly. Conservative Members favour poor-quality accommodation and shoddy wages, under employers who are not prepared to pay the going rate for the job.

Mr. Simon Coombs: rose—

Mr. Smith: We believe in high-quality accommodation, a statutory accommodation grading scheme and a minimum wage.
At present, the responsibilities of the British Tourist Authority, the regional tourist boards, the national tourist boards and local authorities overlap. All are doing good work in their own ways, many despite tight financial constraints; but there ought to be a better way of co-ordinating that work. I looked for that in the Government's document on tourism policy, but it was not there. I wish that the Government would turn their attention to ways of rationalising promotional activities.
The Government should also do something about the state of our beaches and bathing water. One fifth of our beaches currently fail to meet mandatory standards, and two thirds fail to meet guideline standards.

Mr. Dorrell: As the hon. Gentleman knows, the Government are doing something about that. Ten years ago, half Britain's beaches did not meet the standards; now, only 20 per cent. do not meet them. By the end of the decade, all beaches will meet the standards and £2 billion will have been invested in the process. Does the


hon. Gentleman want us to spend any more? Does he want us to do more than ensure that every beach meets those standards?

Mr. Smith: I would have appreciated the Secretary of State's point more if he had not omitted to mention that eight years ago, during the European elections, the Tory party said that all beaches would meet the mandatory standards within five years. Now, eight years later, one fifth still do not meet those standards. Of course progress is being made, but it is being made painfully slowly. Opposition Members have long argued that the water companies—whose primary responsibility this is—should be borrowing long to fund work that will last for 50 years, rather than placing virtually all the burden on today's customers. People living in the south-west feel particularly strongly about that.
Of course people do not come to Britain to sunbathe, but both international and domestic visitors like to stroll along a clear beach. They like to let the kids play in rock pools and paddle; perhaps they themselves like to go windsurfing or sailing. With the water and the beaches in their current state, that is not possible.
The state of our public transport networks also needs attention. In particular, the Secretary of State must not be so dismissive about the real concern felt by tourism about the prospect of rail privatisation. "Guidelines for Tourism to Britain", published by the British Tourist Authority in late 1993, puts it very clearly:
The impact of British Rail privatisation on tourism (and on the marketing of it) is … of particular concern to BTA. If the rail facilities currently offered to overseas visitors are discontinued and/or the network becomes more fragmented, complex and expensive … for these visitors to use, valuable tourism earnings could be lost to nearby competitor countries".
Precisely that complexity and fragmentation are being introduced to the public rail network by privatisation, which is bound to create further problems for the development of tourism.
The Secretary of State lightly dismissed the point about the Fort William sleeper, but it is a classic case in point. To travel on the sleeper, which I suspect the Secretary of State has never done, is to experience one of the great railway journeys of the world.

Mr. Simon Coombs: Not many people have done it.

Mr. Smith: In fact, those who try to book a place on the sleeper between now and the end of May will find that there is hardly a place left. People are only now learning of the existence of the service, because of all the publicity that has attended its threatened demise. If it had been marketed thoroughly and intelligently over the past five or 10 years, more people would have used it and we should have been able to retain that valuable service.

Mr. Dorrell: The hon. Gentleman has attacked the management of British Rail for failing to promote the service properly, but that is exactly the management model that he wishes to preserve. How does he reconcile the two arguments?

Mr. Smith: I have never argued that everything done by British Rail's management has been perfect, but it is not necessary to privatise British Rail to correct some its

individual policies. The Government will not recognise that; what they will do is create a disaster from a service that works reasonably well, if imperfectly.
The Government should pay more attention to tourism's impact on the environment. The Council for the Protection of Rural England's recent report, entitled "Leisure Landscapes", raises serious concerns. The Government have not really begun to deal with them. Tourist activity and attractions do not need to be incompatible with environmental protection, but account must be taken, with careful planning, to ensure that they respect the needs of the environment in which they occur. Perhaps it would be sensible for the Government specifically to charge the English tourist board and the other national boards with the task of overseeing and of ensuring that that takes place.
On the Secretary of State's announcement today about tourism signpost deregulation, we are in favour of more signposting. Quite a number of tourist attractions could usefully be included among those that are signposted. We would strongly argue, however, that the familiar brown and white signpost format should be maintained and that it should not become a free-for-all. We do not want to see advertisements for McDonald's at every motorway turn-off.
Tourism related to sport is becoming increasingly important, but better information about sporting activities in Britain must be made available to people who would not normally automatically receive that information. It would be difficult, for example, for someone living in Europe to find out when and where test matches were taking place in Britain. Let us make that information more widely available.
Work can and should be done for Euro 96 next year. Many thousands of visitors will come to Britain for the football matches. Let us ensure that the people who come to the cities for the football matches will be informed of cultural and heritage programmes and other tourist activity. Again, little sign exists of the Government taking any initiative in that.
Finally, let us urge the Government to recognise that patterns of tourism and tourist activity are changing. There is more desire for activity-based holidaymaking. Visitors to Britain seek a wide range of activities. Some may want to visit Stratford, York, Cambridge and others of our fine heritage cities. Some may want to visit London's fashion shows and the Ministry of Sound. Others may want to enjoy the Edinburgh festival and, at the same time, discover some of Glasgow's delights. Others may want to walk the Pembrokeshire coastal path. They do not necessarily respond automatically to posters of beefeaters, the tower and London's red buses, the number of which is declining.
Marketing ourselves abroad, providing information about what is available and how to reach places, encouraging more people from Britain to sample the wonderful things in Britain and encouraging more visitors to explore outside London and the other honeypot centres are essential, important and rewarding tasks in the oversight of tourism in Britain. To be carried out, they require an overall vision and a sense of direction from the Government. At present, they are simply not getting that.

Mr. Simon Coombs: This is, I think, the fourth debate on tourism in the House since the last general election. I welcome the further opportunity to discuss this most important and growing world industry. Some of my hon. Friends are veterans of those debates. I welcome the newest arrival, the hon. Member for Islington, South and Finsbury (Mr. Smith). He has clearly mastered some elements of his brief extremely well.
One could feel some sympathy with the hon. Gentleman on a number of points. I want to say a word, as he would not let me say one earlier. In debates of this sort, the normal courtesy is to give way more than once to Back Benchers. As he did not, let me say to him that Conservative Members are not in favour of low-paid jobs; we do not want cheap labour. As the hon. Member for York (Mr. Bayley) said, jobs in the tourist industry are not low paid.
Let me correct the hon. Member for Islington, South and Finsbury on one point. In Spain, which has a powerful tourism industry, unemployment, both among the population and among young people, is 5 or 6 per cent. higher than in this country, and Spain has a national minimum wage. The issue is where one sets the level. The hon. Gentleman simply refused to answer that question. As he knew that I was going to ask it again, he would not allow me a second bite of the cherry.
If one sets the level, for example, at half average male earnings in this country, it is estimated that 750,000 jobs, many of which would be in the tourist industry, would disappear. Employers, small hotels and many other small operations in the industry would also disappear.

Mr. John Sykes: Many Conservative Members were dying to make that point during the speech of the hon. Member for Islington, South and Finsbury (Mr. Smith). In 1995, unemployment in Spain is up 33 per cent. because of the social chapter and the minimum wage. What would the hon. Gentleman say to hoteliers in my constituency who are having to compete with Spanish holidays costing £100 a week? Our hoteliers provide excellent service and accommodation at about £14 a night. What would the minimum wage do to those jobs? Please tell us.

Mr. Coombs: My hon. Friend is intervening on a different speech from mine. I agree with him. Perhaps he will have an opportunity to intervene on other hon. Members who might want to try to convince us that a national minimum wage would help tourism.

Mr. Bayley: Will the hon. Gentleman give way?

Mr. Coombs: It is fair that I should demonstrate a willingness to give way.

Mr. Bayley: The hon. Gentleman was, I felt, scaremongering when, without any justification, he tossed out the figure of 750,000 jobs being at risk if the minimum wage was set at half national average earnings. How many people in tourism industry earn less than that? How many jobs in tourism would be at risk? How does he make his calculation?

Mr. Coombs: I should resist the temptation to get into an employment debate. It is a fair question, but the hon. Gentleman must realise that, if we debate a national minimum wage, tourism will lose out. Perhaps, in the time-honoured phrase, we could discuss it outside the

Chamber. I would be happy to give him the detail. At this stage, it would be more sensible if I moved on. I simply say that he has a point. Of course there are many lower-paid jobs in tourism, but those jobs that would be most at risk from a national minimum wage. Many of them would disappear.
The precise proportion of the 750,000 jobs that would be affected does not immediately occur to me. I do not think that I know it, but that is hardly the point. We must be wary of the minimum wage's effect on jobs in the industry.
Tourism is a well developed—some would say, mature—industry. Both the Secretary of State for National Heritage and the Opposition spokesman quoted figures showing how Britain has lagged behind other countries. The figures tend to overlook the fact that this country has a mature, well-established tourist industry, in which a large proportion of our fellow countrymen and women are already engaged. Tourism in countries whose growth has overtaken ours is often not as well developed.
I shall take just one example. Austria has overtaken us to move into fifth place. Until just three or four years ago, the Austrian border with the Czech Republic, Slovakia and Hungary was closed. Immediately after the changes in eastern Europe, movement in and out of Austria increased dramatically. Therefore, it is not surprising that the tourist industry of such a country which, incidentally, counts every movement from one side of the country to the other even if a person is merely in transit to a third country, has increased to such an extent.
I accept that there is a strong case for helping tourism in this country to grow. We should welcome more visitors although there is always a need to consider the environmental impact, especially in areas of the country that already receive large numbers of people.
Let us welcome the fact that there is agreement on some issues and debate the points raised by the Government's recent agenda for action. The document entitled "Tourism—Competing with the Best" is to be warmly welcomed. It is right that, like the report, we should debate the supply of and demand for the United Kingdom product. How can we improve that product and increase demand for it?
The report emphasises the need to ensure quality, whether in accommodation, the welcome that we give to visitors or the range of attractions on offer. I fully support the proposal in the report to develop benchmarking and best practice in accommodation. The hon. Member for Islington, South and Finsbury was quick to denounce the idea of a review. Over the years, I have had to deal with the difficulties caused by the operation of two systems—the star scheme run by the Automobile Association and the crown scheme run by the English tourist board—and I can tell him that it is a difficult issue.
It would not be right for the Government or the ETB to launch straight into major changes without considering carefully how best to go about ensuring that visitors to hotels and other forms of accommodation have the best possible information about the quality of the product on offer. I hope that the review will be conducted quickly and that changes will be made, but I stress that it is entirely right that we should have the review in the first place.
There is a need to consider how hotels and small guest houses and boarding houses in seaside resorts are to find the funding to make the necessary improvements. The Welsh tourist board, which is still able to use section 4 grants,


turned £23 million of public money into £171 million of private sector capital. That is a ratio of 7.5:1, and anyone who has dealt with development corporations over the years will know that that is not a bad ratio to achieve. I rather wish that my right hon. Friend the Secretary of State would reconsider the whole issue and find a way, not necessarily in the form of section 4 grants, to give greater encouragement to small hotels and boarding houses to improve accommodation.
The effect of that investment in Wales was to increase the number of jobs in the Principality by 39 per cent. in 10 years, which is a substantial achievement. Tourism is a major creator of jobs.
Accessibility and affordability are two other aspects of accommodation that need to be considered. The report does not mention access for disabled people. I fear that disabled people are sometimes the forgotten ones of the tourist industry yet, if one is to believe the remarkable figures in the recently published Touche Ross report entitled "Tourism for all", there could be an additional £17 billion of additional expenditure available every year in Europe if disabled people were able to go on holiday, visit attractions and stay in hotels.
I know that the Government have moved a long way on how to make life better for disabled people—only this week the House gave a Third Reading to a Bill that will make a big difference to them—but it is important that they are not forgotten in the industry or left behind. We owe it to them to make accommodation and attractions accessible and they, in turn, will spend their money, thus helping the industry to become bigger and better.
We need more budget-price accommodation, especially in London. My right hon. Friend the Secretary of State is right to emphasise the importance of encouraging people to visit London but they have to stay somewhere and not all are so wealthy that they can afford the prices of some London hotels. Budget-price accommodation is, however, also needed elsewhere in the country and is important to tourism.
A French company, Accor, owns the Ibis hotel chain. There is a successful Ibis hotel in my constituency, which is always full of people who cannot afford the higher prices charged by some of the supposedly better hotels. The chain gives a good basic service that is well appreciated. It would be nice if British financiers examined this corner of the market and found ways to support it.
Mention has been made of the rating revaluation. There is great concern in the industry about the effect that the latest revaluation is already having, especially, as has been said, on caravan parks. They are likely to be hit especially hard. I have heard increases of 50 per cent. up to 400 per cent. in rateable values mentioned. The revaluation is based on the period between 1988, when the economy was extremely strong and such businesses were doing very well, and 1993, when the country was only just beginning to come out of recession and the market was somewhat depressed in this as in other spheres. I strongly urge my right hon. Friend to carry on his secret negotiations with the utmost vigour. I know that he will.
I am delighted with the news given to me today by the Minister for Railways and Roads in response to a parliamentary question. The Department is to examine tourism signing. My right hon. Friend said that he and the Under-Secretary of State have put a lot of effort into this in

recent years. I was very much involved in the writing of a report by the Select Committee on Employment in 1990, which drew attention to the importance of signing and the need to expand it. I therefore welcome today's announcement.
It has been suggested that the new signs will need a name. Just as the beacons at pedestrian crossings became known as Belisha beacons, perhaps we are today heralding the arrival of the Sproat or the Dorrell sign. We must wait and see.
I agree with the hon. Member for Islington, South and Finsbury that, as well as flexibility, there must be some of caution to ensure that the quality of signing is maintained. It is my reading of the press statement that the brown and white signs will be the basis for the consultation and that we should not envisage a plethora of ugly signs for burger bars. I believe that that point will emerge in the consultation.
Clearly, the lottery is going to make a difference to tourism. According to the latest figures, lottery proceeds are now more than £60 million a week. The lottery is on course for a total of £1 billion in the first year of operation, and we should congratulate Camelot on the effective and efficient way in which it has got it started. I think that Camelot and the lottery will go from strength from strength. If the £1 billion target is reached in the first year, £225 million will be available for arts, sport, heritage and the millennium fund—four out of the five good causes from which tourism stands to a benefit.
Sport has been first off the mark with the announcement of the first awards, but perhaps it is the least likely to benefit. I agree again, however, with the hon. Member for Islington, South and Finsbury that we most certainly want to ensure that we take advantage of important international sporting occasions and boost tourism attendances.
The arts will benefit. The creative arts, inevitably, will see major capital investment, principally at a local level. Apart from London, that investment will primarily affect British tourists. I look forward to seeing a concert hall in my constituency one day. Indeed, my right hon. Friend the Secretary of State may remember that after three days of the lottery I was able to tell him that enough money had already been raised to satisfy all the wants in my constituency. He did not answer me, which perhaps is not surprising.
The heritage stands to gain. My constituency is very interested in the idea of a railway heritage centre to boost industrial tourism, which is sometimes forgotten but is of key importance. The public sector will also benefit from lottery proceeds going to heritage.
Private sector heritage sites and historic houses will face a problem as a result of the regulation that provides that the lottery's proceeds can go only to public or charitable bodies. Privately owned historic houses will have to achieve charitable status to benefit, which will create considerable problems for many of their owners. The tax regime burdens the owners of historic houses and, as a result, dilapidation is continuing and the heritage is suffering. I hope that my right hon. Friend will not lose sight of that problem and will continue to look at ways in which help can be given to preserve our national built heritage that is in private hands.
Of the lottery's causes, the millennium fund will benefit tourism most. It will make a major contribution, especially in London. Several imaginative schemes are already being talked about. One thinks of the proposals for Greenwich, the Bankside power station and Kensington. I hope that


those schemes might catch the eye of the commissioners, although I realise that we can spend the likely total proceeds many times over on excellent schemes ultimately presented to them. I hope that those who are responsible for disbursing all lottery proceeds in the four areas that I have mentioned will keep the impact on tourism very much in mind.
I welcome the additional funding for the promotion of London as a tourism destination. I also welcome the report of the working party on the future of the River Thames. New attractions are important, such as—potentially—the Battersea power station, if it can be sorted out. Indeed, dare I say, the Palace of Westminster is a great attraction to tourists the world over and sadly, we do not pay it enough attention. We take a rather negative attitude to the attractions of the Palace of Westminster as a tourism destination.
Such attractions, lying alongside the River Thames, are likely to lead to an increase in the use of the Thames. Access is crucial. New services, such as that recently introduced by Catamaran Cruisers, the Symphony and the Bateaux Mouches, which some hon. Members may have seen from the Terrace, need encouragement. We need new and refurbished wharves along the Thames to take advantage of one of the world's most famous and most attractive rivers. They can do it in Paris and we should be able to do it in London. I hope that we shall.
Having said a great deal about the way in which we can improve our product—I could have spoken for much longer, but my hon. Friends will want to add many other examples—I shall briefly comment on the selling of United Kingdom tourism. I very much welcome the proposal in "Tourism—Competing with the Best" to look at bookability. It cannot be right that in any typical high street travel agent there are 15 times more brochures for overseas holidays than there are for holidays in Britain.
I warn my right hon. Friend that the margins on overseas holidays are very much greater. There is a financial inducement to travel agents to sell overseas package holidays—it is how travel agents make their money. We shall have to run very hard to stand still if we are to turn around the decline in the share of holidays that British people take in the United Kingdom.
We also need to consider vertical integration of the travel industry—the joining together of tour operators, travel agents and airlines into single companies, enabling travel agents to concentrate their efforts on package holidays requiring overseas aeroplane trips. That problem will definitely confront the British tourism industry.
It is difficult to avoid the conclusion that the decline in United Kingdom holidays is related to the fall in funding for the English tourist board, just as the fall in the United Kingdom market share is related to the rapid rise in promotional expenditure by many other countries. That is not to say that we have not spent a great deal or worked very hard to boost British tourism—we have, but the simple fact is that others have done more.
I pay tribute to the British Tourist Authority, which has made the most of resources, sometimes squeezed from the ruins of currency fluctuations which have left the pound with less purchasing power overseas, to promote Britain in its principal overseas markets. The United Kingdom is an attractive destination, but there are many others and we must work hard to maintain our share. Direct marketing

from the millions of inquiries that we receive every year is an important way forward. The Welsh tourist board has also shown a lead in that area, which is bearing fruit.
Many of the issues to which I have referred are the responsibility of other Departments. In the course of my speech I have mentioned five issues on which my right hon. Friend has to engage in discussions with other Departments. It is not easy to be Secretary of State for National Heritage when one knows that, all around, people have other responsibilities and considerations to bear in mind. The Secretary of State is very much on the side of UK tourism and I rely on him to continue to do his best, as a sponsoring Department with a co-ordinating role. The success of the effort on tourism signing is a good indication that progress is being made.
Despite some of the doom and gloom and some of the figures which are used to justify criticism of their work, the BTA and BTB do a good job and we must ensure that they have the resources and the backing to do an even better job so that UK tourism will continue to go from strength to strength.

Mr. Thomas McAvoy: I am conscious of the constraints on time, so I shall try to be brief. In his opening remarks, the Secretary of State, even taking into account the fact that the Under-Secretary, the hon. Member for Harwich (Mr. Sproat) holds the main responsibility, showed a less than committed approach to the tourism industry. His parliamentary private secretary getting upset is one thing that I am pleased about. The Secretary of State showed his lack of solid commitment to the tourism industry by, for instance, mentioning only Britain, in comparison with the breadth of knowledge shown by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), who mentioning attractions for tourists in many parts of the United Kingdom.
The Secretary of State compounded his approach by referring to the M6 taking him to north Britain.

Mr. Dorrell: No, I did not.

Mr. McAvoy: Yes he did. He referred twice to the M6 taking him up to the north of Britain. Of course the M6 goes to the north of England and certainly does not go anywhere near the north of Britain. Although that is a minor point, it epitomises the Secretary of State's approach to this subject.
As the hon. Member for Swindon (Mr. Coombs) said, the debate takes place against the background of Britain's reduced share in the world tourism market. Rightly and fairly, the hon. Gentleman mentioned the reduction in the grant to the English tourist board. I am afraid that the attitude that the tourist and travel trade is somehow not manly and not British, and that in order to work in an industry that people respect people have actually to make things, is not confined to the Government. The whole British nation, not just the Government, needs to change its attitude.
However, it is the Government's job to try to change that attitude, so that business and employment in the travel and tourist trade is every bit as valued as work in manufacturing industry. The Government fail to recognise the economic contribution made to the country by the tourist industry. It would serve us better if they did more to recognise and encourage that contribution.
When they try to change social attitudes towards work in the travel and tourism industries, the Government should ensure that the impact of those industries and their potential is understood across all Departments. They should help to develop a national strategy to integrate travel and tourism into their mainstream policies for job creation, export growth, infrastructure development and investment stimulation. There is a whole range of opportunities there for the Government to be involved in, and they should be doing just that bit more.
We should also ensure that the infrastructure is expanded. For instance, there should be more emphasis on expanding airports. Glasgow airport is a model of expansion within limited space—work that has been carried out by the BAA. Such activity should be encouraged.
The Government should also have a role in persuading schools, higher education programmes and career guidance schemes to cover travel and tourism, so that training for the industry has full access to public funding and job creation grants.
Of course transport is important, and airport departure tax, like all other taxes on travel and tourism, has a negative impact on a developing industry. Moreover, the impact of the privatisation of British Rail on rail services, especially to the regions of England and to the countries of Wales and Scotland, has not been fully taken on board by the Conservatives.
Anyone who comes to the United Kingdom as a tourist benefits the country as a whole. I certainly agree that London is a first-class attraction—but surely at some point the transport chaos, the traffic congestion and the time wasted in travelling will actively discourage people from visiting the city. However, there has to be a balance, and I strongly oppose any change in emphasis intended to fund London tourism better, to the detriment of other parts of the United Kingdom. A balance means spending in London, but spending in Scotland and Wales too.
The hon. Member for Swindon also talked about sport as an attraction. Some Conservative Members expressed ridicule when my hon. Friend the Member for Islington, South and Finsbury mentioned the role of sport in attracting tourists into the country, but the hon. Member for Swindon did not associate himself with their attitude. I agree with him that sport can be a great attraction for tourists.
For example, there is no doubt that if we managed to get a new Hampden Park national stadium in Scotland for football and other sports, it would attract many tourists into Scotland and thus into the United Kingdom, and would help to secure us our share of the industry.
My hon. Friend the Member for Islington, South and Finsbury talked about Edinburgh and Glasgow, and I shall spend some time talking about another part of the United Kingdom. I am very much in favour of Scotland, which I think has not been properly developed because of a lack of Government support to make it more attractive to tourists. Someone said earlier that people will not come to Scotland to get a sun tan. Nevertheless, Scotland has many attractions that could be a great draw and bring people into the country.
I shall now spend a few minutes on Northern Ireland; as a member of the Select Committee I have a particular interest in it. We should not neglect anywhere else in the kingdom, but Northern Ireland deserves a few minutes. The peace process in Northern Ireland presents the travel and tourism industries there with great opportunities and challenges. They could provide much employment, which as we all know will contribute to the peace process in its own way, by giving people a stake in their own country and giving them something that they can look forward to each day.
Between 1990 and 1993, visitor tourism to Northern Ireland grew at an average rate of 3 per cent. per year. Within that total, holiday visitors increased by about 5 per cent. That increase was achieved at a difficult period for the travel industry in general, and in spite of the problems that we all know were and are specific to Northern Ireland. The fact that, despite those difficult circumstances, the Northern Ireland tourist trade grew in real terms shows its great potential.

Mr. Nigel Waterson: Can the hon. Gentleman confirm that one of the major growth areas in tourism to Northern Ireland consists of citizens of the Republic of Ireland, Eire, going there for their holidays?

Mr. McAvoy: That is right. It has been estimated that only 5 per cent. of the population of the Republic of Ireland have spent a night in Northern Ireland, so there is great potential there. And the potential goes two ways. So there is a practical basis for cross-border co-operation in the island of Ireland.
If we can achieve the peace dividend in Northern Ireland, that will present great opportunities, because there will be construction work and work in the hotel trade. As has been said, as well as the more luxurious type of hotel facilities, small businesses will be providing bed-and-breakfast accommodation.
All that needs support, and we need to give people who go to Northern Ireland as well as to other parts of the United Kingdom the benefit of a change in our attitudes to travel and tourism. There is hope—as I know, because during a recent Select Committee visit to Northern Ireland we visited some first-class structures and potential tourist attractions. One of those was the equestrian centre at Necarne castle at Irvinestown in County Fermanagh, where we met some young people involved in the hotel trade.
One young man, Stephen Conway, epitomised the change in attitude for which we hope. He is at Durham university studying travel, tourism and the leisure industry, although he originally thought of training as a teacher. That shows a realistic appreciation of the future job opportunities in Northern Ireland. Younger people may be a bit less inhibited in considering new ways of earning their living, and that says a lot about where we are going.
However, all that needs support, and the Government are reducing their support for the industry. I do not think that that is deliberately malicious, but it is short-sighted and shows their lack of recognition of the country's real potential for growth and earnings through the tourist trade.

Mr. Nigel Waterson: I am grateful for the opportunity to take part in the debate. As my hon. Friend the Member for Swindon (Mr. Coombs) said, we have had several such debates so far during the life of this Parliament.
I have a major interest in tourism, as I represent Eastbourne, Britain's premier seaside resort, in which some 6,000 jobs and more than £100 million are accounted for by tourism. I am also a regular columnist for Travel Weekly, so I take a considerable interest in the industry as a whole.
I wish to say a few words about the great British holiday and to what extent we can preserve and enhance it in the latter part of this century. Eastbourne was originally laid out by the then Duke of Devonshire. It was described as a place built by a gentleman for gentlemen. With the advent of the railway and the growth of sea bathing as a leisure pursuit, it developed as a resort. Later, perhaps up to the mid to late 1950s, we had the bucket-and-spade type of holiday, which I believe is still popular in resorts such as Blackpool.
Like every seaside resort, we have seen basic structural changes over the years. To survive and prosper, we have to move with the times. Things have changed. It has become easier to travel abroad. With the abolition of exchange controls and the growth of package holidays to the Mediterranean, people's pattern of holidaymaking has changed, perhaps irrevocably, in many respects. Figures from the British Tourist Authority show that just over half of the 58 million holidays taken last year were spent in Britain, compared with 86 per cent. in 1965 and a staggering 93 per cent. in 1955. If that trend continued, more people would take a holiday abroad than at home by the end of the century. Perhaps even more relevant is the fact that the average sum spent on a British holiday was £146 while on a foreign holiday it was £564.
With exposure to foreign holidays, people's tastes have inevitably changed. I have described the old bucket-and-spade week by the seaside. That no longer has the attraction that it used to have. Many resorts like my constituency have had to move with the times. They see that the modern visitor is more sophisticated. They look not only for good value for money but a more interesting range of activities. One such example in my constituency is the Butterfly Centre, which has been an enormous success. My hon. Friend the Minister had the opportunity to visit it during his visit to Eastbourne. It also has similar tourist attractions.
Linked with the range of attractions is the question of quality accommodation, food and so on. We had a discussion earlier about the national minimum wage, which is part of Labour party policy, even if the party is coy about the level at which it would fix the minimum wage.
I appreciate the difficulty of the Opposition Front-Bench spokesman, the hon. Member for Islington, South and Finsbury (Mr. Smith). I know his constituency intimately, having fought it in 1979, albeit unsuccessfully. It is a splendid constituency full of splendid people, but it is by no stretch of the imagination a regular and important tourist centre. The hon. Gentleman is labouring under the difficulty that he does not appreciate in a practical sense the problems that a minimum wage would bring. I invite him to come to Eastbourne and meet the

hoteliers and guest house operators and hear from them at first hand how much they wish to see deregulation not only in the labour market but across the board so that their businesses can survive and grow. If the national minimum wage is imposed across the board we shall see job losses, especially in the tourist and leisure industry, and we will see businesses, particularly those on the margin, go out of business.

Mr. Tony Banks: The only reason why I interrupt is that the hon. Gentleman does less than justice to the London borough of Islington. Camden passage, for example, has a wonderful array of antique shops which are regularly visited by large numbers of people who come to London. Sadler's Wells is also in Islington. The hon. Gentleman's comments about Islington clearly reveal that he does not know a great deal about a constituency and borough which he fought unsuccessfully. I now understand why he did not succeed.

Mr. Waterson: I was making the point not that Islington is not part of the exciting, vibrant London experience but that it is not, as a borough, a tourism centre in the same way as Eastbourne, any more than the hon. Gentleman's constituency could be so described by any stretch of even his imagination.
I move on from the national minimum wage to other exciting developments in terms of the product that Britain offers. A perfect example is the Centerparcs company, which provides modern, popular resorts dotted around the country, one of which I have had the pleasure of visiting.
The point that we must keep coming back to is the tourism deficit of some £3 billion or more. Inevitably, we are debating this evening the document "Tourism—Competing with the Best". I should like to add my congratulations to my right hon. Friend the Secretary of State, to my hon. Friend the Minister and to everyone involved in producing that superb document. It sets out some important landmarks—signposts, if I may use that expression, to the road ahead for British tourism.
The report tells us that United Kingdom revenues from domestic and in-bound tourism came to £33 billion last year and that we had more than 20 million visitors from overseas. However, the problem is that although tourism may be the world's fastest growing industry, growth in Britain has been significantly slower than that in many of our competitors. As the report points out:
If Britain could restore the share to its 1980 level, earnings would increase by £3 billion.
That equates almost exactly to the size of the current deficit.
We have heard about the importance of increasing the quality of accommodation and value for money and the issue of benchmarking, which is so important. I am delighted that the Government have mounted the initiative in co-operation with the Confederation of British Industry because I see benchmarking as the way ahead. Not that we do not have a large stock already of excellent accommodation, but there is always scope for improving what we have and getting more.
Bookability has rightly come to the fore. It is easier to book a hotel abroad than one in this country. Once people stumble across a good hotel here, they tend to go back to it over and over again on the basis that they have found one with which they are happy. Although there are many books and guides, often with their own registration and


points system, it is often a lengthy process to find an appropriate hotel in the area that one particularly wants to visit. The English tourist board has recognised that. John East and his colleagues have recently announced a strengthening of the crown scheme for grading hotels. It needs to be simplified as well as extended and made more accessible to the general public. Some 11,400 establishments are already inspected under the crown scheme in England. That makes it the largest scheme of its type.
We have discussed the role of London. That issue will have some £8 million devoted to it over the next two years. That will consist partly of £2 million pump-priming in the way of extra grant in aid from the Government. The gateway argument is a powerful one. I seem to recall that my right hon. Friend the Secretary of State once referred to London as our international trump card. How right he was. I inject a note of caution into the pre-eminence given to London. It is important and a recognised part of the policy that visitors should be encouraged to go to London as well as to the various regions of the country, to Scotland, to Wales and so on. That is vital.
Inherent in the scheme must be a recognition that there is some differentiation between first and second visits. I draw that to the attention of people such as Sir John Egan who are involved in the scheme. Almost invariably, people who come from America or the far east or wherever want to visit London and possibly nowhere else on their first visit. On second and subsequent visits there is ample scope for them either to visit London only briefly and move on somewhere else or not visit London at all.
The report places emphasis on short-break holidays and additional holidays. It rightly says:
we believe there is potential for growth in the short break/additional holiday market.
Anyone can see that that is a fast-growing part of the market, particularly with the channel tunnel now in operation.
I would make the plea that the main family holiday of two weeks or more is still the one worth having. We have an excellent tourism and community services department in my constituency led by Ron Cussons, and I am indebted to Mark Smith, the tourism services manager, for some comments on the issue. He talks about the marketing of short breaks on the basis that while
spending on long holidays is now flat, real spending on short breaks increased by nearly 15 per cent. between 1990 and 1993.
That bold statistic fails to acknowledge the significance of the relative values of these different holidays, the effect of the recession and the return on marketing investment through additional business. The document shows that the value of the long-stay holiday business is three times that of the short-break market. Mr. Smith says that
it would be 23 years before short breaks were equal in economic importance to long stay holidays.
Figures set out in the Department's strategy document show the underlying trend for long-stay holidays abroad has been increasing since the low point in 1987, and that at a time of recession. It seems to me axiomatic that the long-stay holiday market is much more vulnerable to overseas competition.
It is important that we continue to recognise the importance of the traditional family holiday. Whatever the scope for expanding short breaks and the extra holidays

which people can now afford, the main family holiday is the one which provides the most revenue to the resort. Bookability has a major effect on all of this, but we should remember that the market in UK holidays has always been predominantly direct-sell. There is scope for expanding the existing network of tourist information centres, but most people continue to book their hotels direct rather than through an agency.
Other hon. Members wish to speak in the debate, so I shall summarise. The Department's document is an excellent, well-thought-out and thought-provoking contribution to the debate. It is not claiming to be a comprehensive blueprint for every aspect of the tourism industry. But, among other things, it brings us back to the crucial fact that unless we arrest the relative decline in domestic and in-bound tourism, we shall slip further behind the rest of the world. Instead of the tourism deficit reducing, we will see it yawning ever wider. That is why the document, and this debate, is so important.

Mr. Robert Maclennan: The hon. Member for Eastbourne (Mr. Waterson) paid tribute to the paper which the Government published six weeks ago and which inevitably forms the background to this important debate on tourism. However, the hon. Gentleman also put his finger upon what seems to me a damning weakness of the paper, which is its failure to mention the decline in the family holiday.
It was notable that the Secretary of State in opening the debate did not choose to describe or deal with the problem of the decline in long-stay holidays. The most attractive aspect of the Secretary of State's speech was that he made no grand claims about the Government's ability and willingness to do a great deal about the tourist industry. The document is suitably modest in its statement that it is not a comprehensive strategy for the industry, but the beginning of a process of identifying some key issues. That is certainly not to inflate the document.
What the document does—this is useful—is to describe the depressing relative decline suffered by the United Kingdom tourist industry in the past 10 years. Tourism's importance is beyond question, and that is accepted on all sides. In 1994, tourism provided 7 per cent. of all United Kingdom jobs—the UK's fourth-largest employment sector. Some 5 per cent. of GDP—an estimated £33 billion—was provided by tourism. Tourism, according to the Organisation for Economic Co-operation and Development, is due to become the biggest single industry in the world by the year 2000 and, in the 10 years from 1982 to 1982, it grew by 70 per cent.
It must be noted that the UK's world market share has fallen from 5.6 per cent. to 4.3 per cent. in 10 years, a drop of nearly 20 per cent. The Department admitted in the paper that Britain's growth has been slower than most of our European competitors, and that our share of world markets is falling. If Britain restored its share to the 1980 level, earnings would increase by £3 billion. That would be a considerable achievement, but there is little evidence that the Government have any clear view on the role they can play in bringing about such an increase in activity.
It was notable that the Secretary of State gave few examples of direct Government help to the industry. He spoke of an additional £2 million per annum to be given to help market London abroad in the next two years. It


must be said that that is a modest amount to assist London in international marketing, and it cannot compensate in the slightest for the absence of a properly elected, local authority for London which could carry out promotional work abroad. It seems monstrous that this great capital city is alone in the civilised western world in having no city government. Tourism is undoubtedly suffering as a result. The inability to tackle London's traffic and transport problems must, in major part, be due to the absence of such an authority. The responsibility lies far beyond that of the Secretary of State—the sponsoring Minister—but I hope that he will at least recognise that he should throw his weight behind the movement to democratise London, as it is very much in the interests of the industry that he says that he sponsors that he should do so.
It is interesting to consider some of the examples of Government sponsorship of the tourist industry in the paper. Some seem patently ridiculous, for example, the reference to immigration, which states:
under the Citizens Charter, performance times exist to minimise the time a foreign visitor has to wait before seeing an immigration officer.
In a month in which the European Union has removed border controls, that seems simply to point up this country's deficiencies in welcoming foreign visitors as compared with our rivals in continental Europe. It will also leave a rather sour taste in the mouths of the ethnic minorities, many of whom have had the unpleasant experience of trying to bring their families here for some family occasion, only for them to be turned away at the frontier, unable to join the celebration.
The truth is that those so-called sponsoring examples are the dross and the spin-offs from other policies, for example the dubious claims of benefits from macro-economic policy, including economic stability and low inflation. No one doubts that such economic management, were it to persist, would benefit the tourist industry, but it is plain that the Government's economic mismanagement, resulting in the massive increase in taxation, in particular in value added tax, has had a peculiarly adverse effect on tourism and the comparative costs of staying in British hotels and eating in British restaurants and other establishments. The Government's economic mismanagement has put our tourist industry at a direct competitive disadvantage.
Nor have the Government in any way sought to offset the disadvantages caused by economic mismanagement by increasing direct assistance to the industry, through grants in aid, notwithstanding their recognition of the importance of the British Tourist Authority and the national tourist boards. The English tourist board has had its grant in aid reduced from more than £23 million in 1988–89 to £11.3 million in the present financial year, and it is expected to drop by more than £1 million more in the next financial year. The boards play an important role in providing leadership and as a catalyst in marketing and making possible the marketing of an industry which, of its nature, depends on small businesses, which are incapable of conducting effective marketing overseas on their own behalf.
The omission in the paper, to which I alluded briefly, is that it has written off the coastal industry and the longer domestic holiday. In the words of Mr. Peter Hampson, the director of the British Resorts Association, the Government

appear to have confused managed change with decline.
There is no mention of seaside or coastal resorts in the report and I find it odd that the hon. Member for Eastbourne (Mr. Waterson) could praise a report that is so defective.
Mr. Hampson states that
the theory that coastal tourism has declined to a point where it is all but dead is nonsense, particularly when you consider that in both terms of volume and of value, the coast accounts for just under 50% of the UK's total internal holiday activity. It is the biggest sector by far".
The paper emphasises the value of short breaks and is promoting them as a new avenue for the tourist industry for the future, but the value of short breaks—I do not underestimate it—remains less than a third of that of long breaks, despite the fact that it involves three times as many individual holidaymakers.
It is questionable whether the Government have even got their sights properly adjusted. A major cause of the relative decline in UK tourism is the vast increase in the number of holidays taken abroad. The paper records that, 10 years ago, 55 per cent. of total tourist spending by the British was in the United Kingdom—today it is only 45 per cent. Certainly, United Kingdom citizens are more likely to take short breaks in the UK for reasons of convenience and, therefore, the longer-stay breaks are more vulnerable to foreign competition. Unless the Department of National Heritage is simply happy to surrender the valuable long-stay market, strong marketing support for that sector is essential for continued prosperity.
The Government have had the benefit of a commissioned report by Mckinsey and Company, which found that the most substantial opportunities to improve performance in the domestic market lie in reinvigorating the accommodation sector and making it easier book a British holiday. None the less, there is no evidence that the Government are willing to make additional public resources available for that purpose. Fifty-nine per cent. of inbound visitors stay in hotel accommodation, which accounts for 30 per cent. of their expenditure. In a recent survey, 30 per cent. of visitors said that their hotel did not meet their expectations, so it must be right to tackle that problem. I hope that the review of the crown scheme, which the Government admit does not work as effectively as it might, to alter the perception of British hotels, will achieve substantial improvements.
I mentioned briefly the impact of value-added tax on the tourist industry. What is the Government's attitude to the harmonisation of VAT? We suffer seriously from being so far out of line with other European countries. In January 1993, EC directive 92/77 agreed transitional arrangements on VAT that will remain in force until 31 December 1996. Those allow member states to apply a minimum rate of 5 per cent. to a limited list of services, including hotels. Although the directive seeks to harmonise VAT rates, if the United Kingdom detaches itself from that process, Britain's international tourism competitiveness is in danger of suffering a further serious blow.
It is high time that the Government stood up to the pressure of the Euro-sceptics, which appears to stand in the way of harmonising this country's tax rates with those of other European countries. The argument against differential rates of VAT in the United Kingdom which


might be invoked to assist the tourist industry's comparative difficulties has been exploded by the Government's decision on domestic fuel.
This is a short debate and, although I am the only spokesman for my party, I shall not speak for too long as a number of other hon. Members undoubtedly wish to speak. I must allude, however, to one of the most serious threats to tourism that this country has seen for many a day: the appallingly misconceived and mismanaged privatisation of British Rail. Its consequences on the tourist industry are not speculative. It is already clear that great damage is being done to tourism by the plans that are being announced and the franchises being proposed by the franchising director.
There are other occasions to debate what can and should be done for British Rail. I merely allude to Sir Bob Reid's clearly expressed view that it was madness to separate Railtrack from passenger service operations. It will certainly be deeply damaging to tourism and the use of railways to the more sparsely populated parts of the country such as my constituency, which has already seen the withdrawal of special tourist trains during the summer months, at great cost to local business.
That is not merely the view of a local Member of Parliament retailing some odd facts; it is the considered view of the chairman of Highlands and Islands Enterprise, Mr. Fraser Morrison, who was appointed by the Secretary of State for Scotland. In a letter to the Secretary of State for Transport, he made plain his concern and that of the body responsible for promoting tourism in the highlands. He said:
With no airport at Fort William, the sleeper and Motorail services give direct links into the area from the south. We already have reports from local tourist operators of holidays being cancelled due to the loss of the sleeper service.
The Department of National Heritage should raise its voice about that.
I ask the Minister, who has had knowledge of Scotland as a result of having represented a Scottish constituency for some years—one beyond the central belt—to recognise that that form of tourism is crucial in the development of tourism in the north.
The Minister must recognise that the numbers of people who travel in no way measure the input into the region that comes from sleepers and Motorail. Many of the people who travel by those modes of transport are long-term visitors who are going for a season's sport or to stay in the remoter parts for a long time. They bring into the region valued money, which is needed to sustain the fragile economies of the sparsely populated areas of scenic attractiveness.
The matter must not be dropped. Consultation should be embarked on properly, according to the statute, before the final dispositions for the summer timetables are made. It is a matter of the utmost urgency if there is not to be a sharp decline in tourism into the north of Scotland this year.
I believe that the industry is one of those with the greatest future, provided that it is handled with imagination and a willingness, not merely to point in a random way to some of the current problems, as I suggest that the report before us tonight does. It needs a strategy, but the Government have not evolved one.
I know that the Minister is aware of the importance of the arts and heritage in drawing people into this country. I am glad that new resources are entering the capital funding of some of our great artistic enterprises. However, I am deeply worried about the apparent impact that the national lottery is having on the Foundation for Sport and the Arts. Vernons has withdrawn from the scheme to the maximum extent of which it is capable, and there are fears about what Littlewoods may do.
In a short time, the scheme has brought £300 million investment into the arts. It is especially valued in some of the smaller communities, where the foundation has, without any bureaucratic fuss or difficulty, sustained extremely important local heritage, artistic and sporting activities.
I beg the Government to look with favour on the proposals for an adjustment in the current Finance Bill to relieve the pools industry of a proportion of betting duties, to offset the great losses that it has suffered as a result of the introduction of the national lottery.

Mr. Toby Jessel: The hon. Member for Caithness and Sutherland (Mr. Maclennan) spoke for 20 minutes. He is perfectly well aware that four other hon. Members hope to speak before the winding-up speeches from the Front Benchers, which are due to begin in 12 minutes, at 9.25 pm. He would receive more sympathy for the causes that he championed—he seems to want to say everything that he can think of—if he had been a little more brief.
The hon. Member for Caithness and Sutherland said that, if the Greater London council were restored, it would promote tourism in London. I believe that turning the old county hall into a hotel as soon as possible would do a great deal more to promote tourism in London.
London has already figured prominently in the debate. If one is trying to sell British tourism abroad and to market it—to which my hon. Friend the Member for Swindon (Mr. Coombs) made an eloquent reference—one must attract people here. We cannot attract them with the weather, but the one thing that they have heard of is London. Whether they come from Chicago, Houston, Tokyo or Osaka, they have all heard of London. A few tourists might have heard of Edinburgh, York or Oxford, but hardly any will have heard of Stonehenge or Stratford-on-Avon, let alone places like Norwich and Lincoln. What brings people here to Britain is London. Once we have got them here, by attracting them through London, we can try to disperse them around the country.
London has a serious accommodation problem; it has a serious hotel problem. It has a great many excellent restaurants. In the past 20 or 30 years, the variety and standard of food in London have improved out of all recognition. Perhaps we do not make enough of that. But there are not enough hotels. They are expensive, quite a lot of them do not give satisfaction and many of them are dull and must be sparkled up.
We must get more hotels; more must be built. Unfortunately, our planning law consists of a system, under which people apply for planning permission for a particular design of building such as a hotel. A local authority either has to accept or to reject that application. There is no leadership over what sort of hotels are likely to obtain planning permission. Many of the architects


have bad taste; they produce tall hotels with blank-looking exteriors and flat tops, except for excrescences such as the top of lift shafts. They are unpleasing to look at. Whenever someone proposes to build a hotel, it is difficult for the local authority to grant planning permission because the plan is normally so ugly that it is hotly opposed by everyone living round about. That is one of the reasons why London is short of hotels.
The demand for hotels is not met and hoteliers are able to charge exorbitant prices. That is why London has such a bad reputation in terms of value for money in hotels. It is important that something is done about that. I hope that my hon. Friend the Under-Secretary of State for National Heritage will assure me that the Government are getting a grip and providing a lead.
The key to the problem is the south bank. There are places all along the south bank, not just at county hall, where hotels could be put. Let us have some attractive designs with sloping roofs such as one might see on an alpine hotel. People would not be so opposed to such hotels, which could be put along the river where they would have views of St. Paul's cathedral. In that way, we shall begin to meet more of the demand for hotels in London. We shall provide what is needed as a basis for the expansion of tourism, which is so important to this country in terms of the employment, income and tax yield to the Government that it generates.

Mr. Paddy Tipping: This is a timely debate because only last month the Back-Bench Labour tourism committee was formed. The debate gives us the first opportunity to participate in discussions on the subject.
One of the themes being discussed in the Back-Bench committee is to see London as a gateway to the United Kingdom, while ensuring that the regions also get their share of the action. Nobody minds extra money being used to promote London, but the concept of a gateway must include avenues that lead to the regions. We need to ensure that the regions receive their share of the action because, as we have heard, there is a declining market share of tourism. We need to set that against the background of cuts in grant in aid to the English tourist board and argue again about the relevance and importance of section 4 grants.
The Government could take other measures—for example, they could examine taxation policies. There has been discussion this evening about the non-domestic rating revaluation from 1 April, and I shall give the Under-Secretary an example from my constituency. The rateable value of a small snack bar near the major oak in Sherwood forest has increased by 100 per cent. That clearly cannot be right, and all tourist businesses in Nottinghamshire face increases well above the rate of inflation.
We must also examine the question of value added tax on accommodation. The rate of VAT on accommodation is well in excess of the taxation rates elsewhere in Europe, apart from Denmark. If the rate of VAT were reduced, there is a real chance that the tax take would increase. Currently, some 50 per cent. of hotel beds are unoccupied and something must be done to address that problem.
I welcome the liberalisation to which reference has been made tonight. There have also been changes in policy concerning tourist signs. The Under-Secretary

might care to address the issue of liberalisation in pubs. Children's certificates were available for the first time last month, but the system is not working properly. There are different benchmarks all across the country and there are many unreal expectations. If pubs are to move from the sawdust days to being places where one would be proud to take one's family, we must focus on that problem and establish proper criteria nationwide. For example, in Birmingham licensing magistrates will not award children's certificates during term time. That interpretation must be wrong.
We have been told that the Department of National Heritage is keen to talk to other Departments. It should consider extending daylight hours. That would be a real shot in the arm for tourism. Lighter nights would mean more leisure time in the evening.
I do not wish to be a tourist in my own county of Nottinghamshire, but I must say something about the new Millennicom project, which is a private-public sector initiative—the sort of thing that the Government are always promoting. Nottinghamshire is moving away from the old coal tradition to new information technology. The scheme will involve more than £1 billion over 10 years and could create 14,000 jobs in the area. There will be pavilions for new technology. It is a good scheme for the future which will transform the landscape. Nottinghamshire is changing from coal to tourism; tourism can be a part of our new future.

Mr. David Harris: In the three minutes available, all that I can do is highlight some of the concerns that have been raised with me in a series of meetings with local hoteliers and representatives of tourism in my constituency. I have held three meetings in Penzance, St. Ives and Helston, which also covers the Lizard. At the top of the agenda was undoubtedly the topical issue of revaluation—a subject that I raised with my right hon. Friend the Secretary of State during his speech.
The issue has surfaced again and again in the debate. There is real concern about the measure, particularly among the operators of caravan and holiday home parks. I urge my right hon. Friend and my hon. Friend the Under-Secretary of State to take seriously the points that have been made by the British Holiday and Home Parks Association. I am willing to join with colleagues on both sides of the House to try to right a clear wrong. Valuations do not affect only holiday parks, as there have also been valuations on some hotels.
My second point—I underline what the hon. Member for Sherwood (Mr. Tipping) has said—deals with value added tax. In all my years in the House, I have never believed that we have had the right structure for the promotion of the tourism trade. I illustrate that, as I have before in the presence of my hon. Friend the Under-Secretary, by pointing out that the West Country tourist board stretches from the Isles of Scilly in my constituency to the constituency of my hon. Friend the Member for Swindon (Mr. Coombs). That is an unmarketable area and there should be a radical review of the whole system of marketing and promoting holidays.
Transport is vital to areas that are a long way from London, such as my constituency. London certainly has a part to play. It must be the catalyst that brings in many


people, but it is not the only centre of tourism in the United Kingdom. We must, therefore, have good transport links from the centre to the periphery. I am delighted that the sleeper—you have a vested interest in this, Madam Deputy Speaker—to the south-west and Penzance is safe for the foreseeable future, in my opinion as a result of privatisation.
We also need to develop flights right into the west country. I pay tribute to my hon. Friend the Member for Salisbury (Mr. Key), a former Minister with responsibility for tourism, who proposed an idea which I back and on which we have been working—that Newquay airport should be developed for incoming flights. Nevertheless, he is the son of a late Bishop of Truro.

Mr. Tony Banks: I have fewer than five minutes to speak, which is more than for some and better than a poke in the eye with a sharp stick, but I suggest that some hon. Members who spoke for a considerable time are very selfish. They know who they are and I hope they will bear that in mind in future.
I shall speak for a few moments about tourism in London. It is extremely important to the capital city. Last year, tourism earned more than £5.5 billion, 80 per cent. of which was in foreign exchange. Tourism ranks among the top three industries in terms of economic importance, employing more than 200,000 London residents and representing between 4 and 5 per cent. of the capital's gross domestic product. It is certainly one of our most significant industries, but one can voice many criticisms about tourism in London.
There is a scarcity of multi-language signposting around the capital city and a lack of announcements on the transport system that are understandable even to natives. There is an appalling lack of tourist information booths and offices in London. One gets the feeling that, all too often, tourists are regarded as a nuisance—a valuable nuisance but still a nuisance—and we must do far more to enhance standards of information, transport, accommodation and publicity.
The hon. Member for Eastbourne (Mr. Waterson) made some fairly inaccurate comments about my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) and the attractions of the borough of Islington, and I was able to correct him. He went on to compound his ignorance by talking rather disparagingly about the east end of London, where I come from, and suggesting that not even in the furthest extreme of my imagination could I say that it would attract tourists. He could not be further from the truth.
The hon. Gentleman should have been in Newham this morning when we took the Minister for Local Government, Housing and Urban Regeneration to see the city challenge part of Stratford and the tidal mill at Three Mills—a wonderful tourist centre which has been developed with Government money through city challenge and English Heritage and which will provide an enormous tourist attraction for people not only in the east end but throughout London, if people get to know about it.
Many things going on in the east end of London, as opposed to the centre, are worthy of being developed for tourism purposes. I wish that the hon. Member for

Eastbourne were in his place. Having told us about delights of his area, he could at least have listened to other hon. Members speaking about the delights of their constituencies.
Today, a new tourist map was unveiled in the east end of London: "Tour East London—what to do and how to get there", a fold-out guide to east London which lists more than 150 attractions and has an illustrated hand-drawn map on the reverse to help visitors.
The map sets out heritage sites, museums and galleries and urban farms and gives examples of the best in contemporary architecture. It provides details of opening hours, admission charges, the nearest bus, rail, tube or docklands light railway services and information on facilities for the disabled. It includes suggestions of places to eat and drink and lists the area's theatres, clubs and cinemas, while shopping includes the famous east end markets such as the Columbia road flower market, the cosmopolitan food stalls in Ridley road and the Sunday flea market around Brick lane. I am sure that there were quite a few tourists there the other day to see Ronnie Kray laid to rest. Ronnie is no longer with us—if indeed he ever was—and he is probably now up in heaven pulling the wings off angels. I am not suggesting that we should regularly bury gangsters as a way of attracting tourists to the east end of London, but many people were able to look around and see that there are many things in the east end that are so much more attractive than the Krays.
The House should have more information about what is available in London as a whole. If hon. Members knew more about London, we would be far better able to inform tourists who come to this great capital city that London is not just about Westminster in the centre and that it stretches right out to the east end to the wonderful London borough of Newham, which I have the honour to represent in this place.

Mr. Tom Pendry: This has been a good debate but it has been too short. Some interesting and thoughtful speeches have been made. We heard a very long but thoughtful speech from the hon. Member for Swindon (Mr. Coombs). I was pleased that my hon. Friend the Member for Glasgow, Rutherglen (Mr. McAvoy) raised the importance of job creation in tourism and the potential of tourism in Northern Ireland. As a former Northern Ireland Minister, I fell in love with that beautiful Province. It is good that tourism is returning there in abundance.
Unfortunately, many hon. Members, including the hon. Member for Eastbourne (Mr. Waterson) and for St. Ives (Mr. Harris), and my hon. Friends the Members for Sherwood (Mr. Tipping) and for Newham, North-West (Mr. Banks) had to make very short speeches because of the lack of time. Indeed, hon. Members will be sad to hear that I have had to reduce my speech.
We seldom have an opportunity to debate tourism, so I am sure that I am joined by many of my hon. Friends and, indeed, others on the Conservative Benches, in being disappointed that today's debate should be held in what was described to me last week by one Minister as the "black hole" of the weekly parliamentary timetable. Perhaps that is one of the telling signs of the industry's lack of importance on the Government's agenda. Tourism deserves better treatment than that. It seems to run


contrary to what the Secretary of State—I am glad to see that he has arrived back in the Chamber—said last Monday at Question Time. He said:
It is only right that the DNH should accord substantial importance to the sector."—[Official Report, 27 March 1995; Vol. 257, c. 677.]
I am sure that all hon. Members present and all those who have spoken in the debate are like me—grateful that we have at least had an opportunity to debate tourism today. This evening's debate has served only to highlight further the differences of opinion between the parties on tourism, which seem to grow ever more pronounced. The contradictions in the Government's own message, or messages, are clear, and nowhere more so than in their document, "Tourism—Competing with the Best", which has been mentioned by many hon. Members, and the shortcomings of which were highlighted by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) in his forceful and timely opening remarks. What a damp squib it has turned out to be, especially when one considers that the management consultants' input works out at £10,000 a page—or to put it another way, £150,000 of taxpayers' money. It told us nothing that the industry did not know already.
Admittedly, the document is useful to a certain extent. It at least acknowledges that the rosy picture painted for the past 15 years was false, as throughout that time we were losing market share. I shall not go over the figures that my hon. Friend gave the House, but we have gone from trade surplus to deficit in a big way. The figures are well known to the House.
Here is the fundamental contradiction: the document recognises the Government's responsibility for an industry that is diverse and fragmented and where co-ordination is difficult. At the same time, it states that the industry must solve its own problems—a point repeated by the Secretary of State at Question Time on Monday and again this evening.
As my hon. Friend the Member for Islington, South and Finsbury pointed out, the document is notable for its omissions—no mention was made of the contribution of local authorities, the importance of visitor attractions or of self-catering accommodation, and many others as well.
In his thoughtful speech, the hon. Member for Swindon raised many important issues, such as access for disabled people and the rating of caravan sites. Having spoken recently at the Home Parks Association conference, I know of the fears that exist, and it is right that they should have been expressed in today's debate. I agree with my hon. Friend the Member for Islington, South and Finsbury that we must watch the tendency to provide tourism signposts, but let me also put in a plea on behalf of the motor heritage museum on the M40, which needs a signpost because it is a worthwhile attraction.
It is clear that the hon. Member for Swindon has not spoken to representatives of the industry in any great depth. I met some of them at last week's British travel trade fair. The vast majority appeared to be unhappy with the document that we have discussed, which is not comprehensive and does not constitute a real step forward. It demonstrates once more that the Government are simply not prepared to listen.
For example, the management consultants who did the background work found that a majority in the industry favoured a statutory grading scheme. Resistance to the idea came from the Minister and the Department. My hon.

Friend the Member for Islington, South and Finsbury has already spelled out the Opposition's strategy, and we have heard a number of speeches rejecting the statutory scheme. When will those hon. Members realise that the idea is not driven by ideology, as seems to be the case with everything that they do? It is on our agenda because, while appealing to common sense, it also happens to be what the industry wants. I believe that it will also prove a valuable test in overcoming the problems of bookability raised by a number of hon. Members.
At the British travel trade fair last week, I was invited to take part in a brains trust organised by the Tourism Society with about 200 representatives from local authorities, visitor attractions, tourist boards, travel companies and, most important, hotel groups. When the question of a statutory grading scheme was put to that audience of 200 by Ken Robinson, the society's chairman, all but one voted in favour of such a scheme. The British Incoming Tour Operators Association—a highly respected professional body that was represented at the event—has cast its vote in favour of the scheme. How can Conservative Members deny that strength of opinion? How long can that continue?
I understand that the British Tourist Authority is currently studying the effect of a cut in VAT on hotel accommodation and its impact on the industry. Nearly all our European competitors enjoy a lower rate than ours. Will the Government at least take the arguments on board when the BTA's report is published, rather than dismissing them out of hand? I hope that the Minister will refer to that in his reply.
I recently asked the Secretary of State for his views on VAT in a written parliamentary question. He replied dismissively, pointing out that our employers did not have to pay the costs of the social chapter, which has already been mentioned in the debate. Hon. Members who support that line are usually those who set great store by the Government's deregulatory approach. We agree that there is duplication and unnecessary regulation—much of which stems from the last 15 years of Conservative government—and we, too, want to cut some of it, but we also recognise that quality is what will give us a competitive edge. In tourism most of all, perhaps, that quality will come from the quality of service provided by well-trained, well-paid and well-treated employees. Do Conservative Members really think we will win back our lost market share by under-investing in staff who are made to work in poor conditions?
On a similar note to the VAT argument, mention has been made of the multiplier effect that applies to the Government's spending on marketing. Studies such as those completed by McKinsey for the tourist boards make the case very clearly, as do regional studies for Cumbria and other areas. More spending on marketing equals greater returns for the Treasury.
When it comes to bringing in overseas visitors, which our competitors continue to do better than us, as was pointed out by many of my hon. Friends, the Secretary of State should be looking at more than just the confines of his own Department.
In the case of Russian visitors, for instance, the Department should be looking to encourage the Secretary of State for Foreign and Commonwealth Affairs to take a stronger line on visa allocations. It seems, according to the British Incoming Tour Operators Association, that the British consulates in Moscow and St. Petersburg are


processing visa applications very slowly. Because the officers are being so unrealistic with them, potential visitors are simply giving up and going elsewhere, spending their holiday money in our competitor countries.
I wonder what steps have been taken to alleviate that problem. I hope again that the Minister, when he replies, will at least say that he will enter into talks with Ministers in that other Department to find out whether that problem can be overcome. From my own encounters with industry representatives—I think that many hon. Members know that I frequently go around the industry—my impression is that people in tourism are most disappointed with the Government's lack of imagination and their failure to grasp the nettle of partnership action. That is increasingly what divides us and the Government, as was demonstrated by this evening's speeches.
The commitment to tourism of my hon. Friends has not gone unnoticed outside the House. Tonight, we have heard from the new secretary of the Back-Bench committee of Labour Members involved in tourism. The chairman of that committee is also in the Chamber. We had a meeting yesterday, which was addressed by John East of the English tourist board and Adele Biss, the chairwoman of both the ETB and the British Tourist Authority.
A little bird has told me—I am sure that the hon. Member for Swindon will want to know this—that there were five times more Labour Members at our meeting than Conservative Members at theirs two weeks ago. The fact that we have a keen Back-Bench committee demonstrates how seriously Labour Members take the industry.

Mr. Waterson: Will the hon. Gentleman give way?

Mr. Pendry: I shall not give way because of the time, but if the hon. Gentleman can persuade the Leader of the House to give us more time for debates on tourism, I shall certainly give way on another occasion.
Throughout the country—in Brighton and Blackpool, to name but two towns which we will win next time—that commitment is being recognised. Labour's imaginative and committed approach has won friends in seaside resorts across the country. Seaside problems, which other hon. Members have already referred to, are another element missing from the Secretary of State's document, I might add.
Tourism affects all our constituencies these days. It is not just about seaside resorts, Stratford, Bath or Oxford. There are many other regions. Stoke-on-Trent is rapidly catching up on Stratford-On-Avon as a visitor attraction. Stoke attracted about 1.8 million visitors, bringing £75 million to the local economy last year. Thirty-eight per cent. of overseas visitors were there for the first time. That was a high figure, as I am sure that the House will appreciate.
In Manchester, the regeneration of the Castlefield area, the G-MEX and the Granada studio tour are all examples of tourism bringing jobs to places that some narrow-minded people would have said were unlikely areas for tourism growth. In Wigan, the constituency of another member of our Back-Bench committee, the success of Wigan pier is exemplary of the kind of strategy that can succeed in reviving the local economy. Bradford,

Halifax and Dudley are all places where tourism has contributed and still has more to give. I could go on because the list is almost endless.
In that regard, the Government have recently emphasised tourism in London. As a north-west Member of Parliament, I welcome the fact that extra money is going to London. However, I ask the Secretary of State to do as much as possible to ensure that, once they do their two or three days in London, visitors are steered to other parts of the country.
In places such as the ones that I have just mentioned, tourism has a great deal to offer. In this, there is an element of the wasted opportunity that underlines tonight's debate. The 150,000 to 200,000 extra jobs that my hon. Friend the Member for Islington, South and Finsbury referred to could have been squandered because our market share has declined over the past 15 years. That is an estimate by the English tourist board.
The Government have thrown up a smokescreen that runs to a 15-page document and a few conciliatory speeches, but we and the industry have seen through that smokescreen. Did the Government really think that they could hide the new £45 million tourism tax, brought in at the previous Budget, by putting value added tax on recreational transport? Perhaps they thought that they were doing just that when Customs and Excise glibly stated that making tourism in this country £45 million more expensive would have no effect on our international competitiveness.
The Government should tell that to the management at Alton Towers, as my hon. Friend the Member for Islington, South and Finsbury said, or to a number of other visitor attractions or to Sir John Egan who, as chairman of the Confederation of British Industry's tourism action group, wrote to me recently. He spoke of the
particular concern that yet again the tourism industry is being seen as a soft target for taxation purposes.
Likewise, does the Secretary of State think that £150,000 on management consultants can possibly start to make up for the £1.3 million that he cut from the budget of the English tourist board? In the absence of any real commitment to improving matters, these are the policies that have marked the Government's approach to tourism.
Finally, the Government and the Ministers on the Treasury Bench had better believe it when I tell them that Labour means business for the tourist industry. The further bad news for them is that the industry is beginning to realise that only a Labour Government will give tourism the recognition and attention that it deserves.

The Parliamentary Under-Secretary of State for National Heritage (Mr. Iain Sproat): My hon. Friend the Member for Swindon (Mr. Coombs) said that this was the fourth tourism debate in this Parliament whereas, I think I am right in saying, we did not have one such debate in the previous Parliament. The fact that we have had four tourism debates is a tribute to the tourist industry and the importance that we now place on it.
The industry has a turnover of some £33 billion a year; it provides 1.5 million jobs; and produces something like 5 per cent. of the gross national product. This country had more than 20 million overseas visitors last years, which was a record. It was up 5 per cent. on the previous year


and not only shows that the Government take tourism extremely seriously but that the industry itself is very successful.
The fact that we have had four tourism debates is a reflection on the power and influence of the Department of National Heritage now has. The Department was deliberately set up to give a voice in the Cabinet to aspects of Government policy which, important as they are—none more so than tourism—did not previously get enough of the House's time. I am, therefore, extremely glad that we have had this fourth debate, which is a tribute to the industry itself and to the Department, which has brought it to the forefront of consideration in government.
I shall deal with as many points as possible. I hope that the hon. Member for Islington, South and Finsbury (Mr. Smith), to whom I gave a fair old bit of time in the BBC debate the other day, will excuse me if I do not accord him quite so much time today. I mean no disrespect.
I thought, however, that the hon. Gentleman was a little grudging about the deregulation of tourism signposting. Almost the last thing that happened before I entered the Chamber was that I received a note from the British Hospitality Association saying that the announcement was absolutely marvellous. I had another note from the Federation of Small Businesses saying the same thing.
I remember how I was attacked during the first of the tourism debates to which my hon. Friend the Member for Swindon referred about the fact that tourism signposting was so restricted. I said then that I was determined to do all that I could to get that changed, and now it has been changed—more proof of the influence of the DNH within the Government.
Some hon. Members spoke as though more signposts meant giant signposts and billboards for MacDonald's, restaurants and pubs, but that is not the case. The truth is that the traditional white-on-brown signs will be available for tourist attractions that need pointing out to encourage visitors.
I shall cite just one interesting former regulation. I am speaking from memory, but I think that this is right. Unless an attraction had 250,000 visitors a year, it could not have a sign. The simple response is how on earth is it expected to get 250,000 visitors if it does not have a sign? All that has been swept away and it is a real advance for tourism.
With regard to deregulation in tourism, I know that, over a year ago, the Department conducted a review of the tourism industry and identified, with the help of the industry, more than 100 regulations which had a damaging impact on the tourism industry. We are negotiating to get rid of as many of those as we can, with proper and important regard to safety. Tourism signposting, which has been announced today, is but another success in a long line of successes.
We were successful with Department of Social Security hostels and I pay tribute to my hon. Friends the Members for Blackpool, North (Mr. Elletson) and for Scarborough (Mr. Sykes) who did so much work. We sorted out the rather more comic, not to say grotesque, frothy beer fuss last year. Also, if I may mention an Opposition Member, I well remember that in the debate in July 1993, the hon. Member for Burnley (Mr. Pike) made the very important point about how ridiculous it was that airlines from the United States which wanted to fly into Manchester were not allowed to do so unless they got a tick of approval

from the British Government and the United States Government. My right hon. Friend the Secretary of State for Transport has now swept that away. The tourism industry is getting the help that it deserves from the Government.
The hon. Member for Islington, South and Finsbury mentioned the 1996 European soccer championships. He made the point—fairly enough—that we should ensure that we tie into that terrific competition as much tourism interest in art galleries, museums and so on as we can. I have had a meeting with various members of the football authorities and the football supporters clubs to ensure that everything possible is done so that we benefit from tourism as much as we should when the football championships are here.
My hon. Friend the Member for Swindon made his usual extremely well-informed and thoughtful speech. I congratulate him on his tremendous work as chairman of the tourism group. I hope that the industry understands how valuable the group is in telling us about the grass-roots worries in tourism, which feed into the Government who try to do something about them.
My hon. Friend made one very important point about jobs in the tourism industry on which the industry as well as the House should grip tight. It is quite true that there are lower-paid jobs in tourism, but the industry provides 1.5 million jobs and if there were a minimum wage in the tourism industry, it would decimate those jobs; it would put out of work the very people that we want to put in work.
Having listened to the hon. Members for Islington, South and Finsbury and for Stalybridge and Hyde (Mr. Pendry), few industries would have more cause to fear any future socialist Government. We would have a minimum wage and all the new regulations that the Labour party wants to impose. We would have statutory compulsory registration of hotels and guest houses. Has the hon. Member for Islington, South and Finsbury any idea how much that would cost? [Interruption.] The hon. Member for Stalybridge and Hyde says that much of the industry wants a statutory compulsory registration. Well, if so many in the industry want it, how come only 11,000 out of 225,000 small businesses in tourism have registered so far? If they think that it is such a wonderful idea, why do not they put their money where their mouths are? It is a very difficult and dangerous road to go down to say to people, "You must comply with the state scheme. You must pay hundreds of pounds to register." We would look at that very closely indeed, which is exactly what we are doing.
In the excellent document "Competing with the Best", the English tourist board said that it realised that the present crown scheme was not everything that it should be, that it recognised the value of information to tourists, whether through a crown scheme, the Automobile Association, the Royal Automobile Club or whatever, and that it was looking very closely and urgently at what is the best way in which to improve and reform that scheme. That is right. It should not jump into something so controversial without looking at it properly.
My hon. Friend the Member for Swindon mentioned the disabled in connection with tourism, and that is a most important point. As he rightly said, there are tremendous economic benefits to be gained, as well as social benefits for the disabled themselves. My hon. Friend knows, although not all hon. Members may share his knowledge,


of the tremendous work of the holiday care service under the fine leadership of Mrs. Mary Baker, and of the co-operation that that service gets from the English tourist board, which runs a special tick scheme—that is, a tick opposite an entry means that there is access for the disabled to those premises.
My hon. Friend also talked about benefits for tourism from the lottery, and we could expatiate on that at great length. It is true that tourism as a sector does not automatically benefit directly from the lottery, but indirectly it benefits greatly. The hon. Member for Islington, South and Finsbury mentioned the European soccer championships, and sport gets 20 per cent. of the benefits.
There are also the arts, and the arrangement there mirrors what the Department of National Heritage as a whole seeks to do. The Department spends about £1 billion a year in encouraging just those features that attract tourism, although it does not deal directly with the industry itself. However, we give the English tourist board and the British Tourist Authority combined about £44 million, and if we add to that what the Scottish, Welsh and Northern Ireland boards receive the sum approaches about £100 million a year—a serious sum. By the way, we are not at the bottom of the European league; we spend the same as France, and we are just about in the middle of the table for direct promotions.
The hon. Member for Glasgow, Rutherglen (Mr. McAvoy) also spoke in the debate. Rutherglen is a constituency that I once knew well, as I had the same experience there as my hon. Friend the Member for Eastbourne (Mr. Waterson) had in Islington. I agree with the hon. Member for Rutherglen that in the past many people thought that an industry that did not manufacture was not a serious industry. Well, tourism is a serious industry; it is growing into the biggest industry in the world, and I repeat that the Government are determined to everything possible to support and encourage it.
The hon. Member for Rutherglen also talked about airports, which are important too. As was mentioned in the previous debate, we have now managed to open to flights between the United States and the United Kingdom every airport in the United Kingdom, apart from Heathrow and Gatwick where crowding makes that impossible. That is a real advance in deregulation to add to the others that I have mentioned.
My hon. Friend the Member for Eastbourne talked about the damage that the minimum wage would do. Of course he is absolutely right. The idea of the minimum wage, on top of the fresh regulations that the Opposition intend to pour upon us if they ever get the chance, must be terrifying for the industry.
The hon. Member for Caithness and Sutherland (Mr. Maclennan) described tourist boards as market catalysts, and that is exactly right. The industry itself must do the main part of the job. If we add up the handsome profits

made in the past financial year by British Airways, the BAA and Forte, to name three major players in the game, they come to about £1.1 billion. Those are terrific success stories, but those organisations also pump their own money into tourism. It must not be forgotten that the biggest single contribution to tourism should and does come from the players themselves.
The hon. Member for Caithness and Sutherland also mentioned VAT on hotels. That is a vexed issue, but I think that the tourist industry slightly overestimates the loss of competitive edge caused by our rate of VAT, and is rather inclined to forget the advantages that they have to weigh against that. For example, food is zero-rated in this country, whereas in France it is not. We do not labour under the social chapter, and so on. So it is difficult to strike a fair balance, but the hon. Gentleman is right that it is a serious problem.
The British Tourist Authority has produced a report on the subject, which has been sent to the Chancellor of the Exchequer—this week I believe, but certainly in the past few days. My right hon. and learned Friend will consider the report and will shortly make recommendations.
The hon. Gentleman also mentioned the splendid work that is done by the Foundation for Sport and the Arts and the damage that could be done to it by the effect of the success of the lottery on the pools companies. That is an important point. It is certainly true that the pools have suffered as a result of the lottery. Not only the pools have suffered. Amusement arcades and anything that depends on disposable leisure income such as bingo and many other activities have suffered. I hope that we will be able to ensure a continuing flow of funds to the arts and sport from whatever appropriate source.
My hon. Friend the Member for Twickenham (Mr. Jessel), whom I just have time to mention—

Madam Deputy Speaker (Dame Janet Fookes): Order. I am afraid that the Minister does not have time.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

CARERS (RECOGNITION AND SERVICES) BILL [Money]

Queen's recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Order [19 December],
That, for the purposes of any Act resulting from the Carers (Recognition and Services) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable out of money so provided under any other enactment—[Dr. Liam Fox.]

Question agreed to.

LIAISON

Ordered,
That Mr. Barry Field be added to the Liaison Committee.—[Dr. Liam Fox.]

Belize

Motion made, and Question proposed, That this House do now adjourn.—[Dr. Liam Fox.]

10 pm

Mr. Cyril D. Townsend: I am delighted to have the opportunity to raise in the House the subject of the United Kingdom's relationship with Belize, a tiny central American Commonwealth country with an enviable tradition of democratic government and an excellent record on human rights. My theme is that the Foreign and Commonwealth Office is in the cautious process of distancing itself from this former British colony, at a time when, in the interests of the United Kingdom and the Belizeans, we should be working closely with them. For our country, there is an element of unfinished business while Belize's independence is overshadowed by an unfounded territorial claim by a powerful neighbour.
I begin by expressing my reservations about the reduction of the British garrison which has been deployed there since 1948, the year when my hon. Friend the Minister was born. Some of us who followed the matter closely at the time of the reduction will take some persuading that the reduction was not largely led by the Treasury.
I visited our brigade-size force in Belize a few years ago with the officers of the Conservative Defence Committee. We were all impressed by the role that our service men performed there, and the wonderful training facilities that they experienced. Here was one part of the world where low-flying training presented no problems.
The so-called saving of some £9 million was a small one, and there was clearly a downside. I appreciate that the political and security circumstances in the region have improved, partly following Guatemalan recognition of Belize in 1991 as a sovereign state. However, as my hon. Friend the Minister, who has stayed out of bed to reply to this short debate, will know, this is not the full story.
Indeed, my hon. Friend's predecessor wrote to an hon. Member of this House last April expressing his concern that
recent Guatemalan attitudes have unnecessarily raised the profile of the territorial dispute.
He rightly raised that matter with Ministers in Guatemala last March. My hon. Friend the Minister will have been told of the disgraceful scenes at the Athens, San Jose, meeting last year, when Belize was not able to attend as an official observer. I hope that the Minister will make sure that our EU partners regularly make statements supporting Belize's position.
Guatemala has not given up its claim to all Belize. Last year, Guatemala restated that claim and deposited the appropriate documents with the UN. Guatemala does not recognise the existing border or the present border markers. It talks about the territory of Belize being at present "occupied", as if it were talking about the west bank. Guatemala publishes erroneous maps in which Belize is shown as a province of Guatemala.
That is unacceptable international behaviour, but it is not just a dispute between two foreign countries, as the United Kingdom had previously agreed that border. For 10 years, there have been documented cases of the Guatemalan military directing settlers into Belize. These

settlers—as is the custom—have been slashing and burning areas of jungle indiscriminately in a designated national park.
Perhaps more than half the settlers have now gone back over the border, but there have been indications that, in recent years, the Guatemalan army has been resisting repatriation. It has told officials in Belize that, if they try to put those people back, they will have to deal directly with the army. Experts are not sure whether the Guatemalan defence forces are entirely under political control.
We are talking about an unstable country in the throes of a nasty civil war and with a callous and brutal disregard for human rights. The Guatemalan army is the largest in the region, with supplies from the United States, including radar which covers much of Belize. The Belize defence forces lack proper radar.
It is amazing to be told that Guatemala has not been prepared to accredit a Belizean ambassador in Guatemala, although Guatemala does have an ambassador in Belize. One wonders whether the forthcoming presidential elections in Guatemala could produce a right-wing leader who could seek to unite the country by taking a strong stand over Belize. If so, the Foreign Office could be caught on the wrong foot.
A letter in November 1993 from the British Prime Minister to the Prime Minister of Belize committed the United Kingdom to playing its part in protecting Belize in the event of a military threat. However, the words "in principle" were seen as weakening the previous commitment—probably justifiably so. As we know from the south Atlantic conflict, sending weak and uncertain signals as to our likely response can be dangerous. I submit that we need to strengthen our assurances so that there is no element of doubt. I am sure that that is the view of many Conservative Members.
Since 1 January 1994, the United Kingdom has not been responsible for the security of Belize. Our forces are down to a company strength, and are there for training only. They have no authority to intervene if any problems arise.

Mr. Jacques Arnold: Bearing in mind the fact that Belize is a member both of the Commonwealth and of the UN—which the Falklands was not—does my hon. Friend think that Guatemala has the message absolutely fair and square that any interference in Belize would be met with a strong response—led by this country, but shared with the UN and the Commonwealth?

Mr. Townsend: I hope that that is right, but my hon. Friend may pick up some reasons why I am more cautious that he is.
British forces in Belize have only three Gazelle helicopters, and a good case can be made for introducing to Belize one large helicopter—such as a Puma—which could expand the range of jungle training, as well as having other uses. The Belize defence force is improving, although it is still very small—even including the reserve forces. It has only light weapons, and it cannot be expected to contain a major invasion force.
International intervention, including air power, would be essential at an early stage if there should ever be an invasion. Britain has assisted with the development of the Belize defence force through the provision of loan service


personnel, training, equipment and advice. I hope that we will hear tonight that that programme of assistance will continue. I wish that we could help them with their radar systems requirement.
The British garrison used to provide some assistance in counter-narcotics operations. Drug trafficking in Belize remains a problem. We should remember that some of those drugs are destined for western Europe. What assistance, if any, will we be giving the authorities in Belize this year and next in that regard? Post-cold war, that is just the sort of new task that our forces should be taking on.
Can my hon. Friend confirm that a Royal Navy frigate will continue to call there regularly? I believe that the local forces have only one naval patrol vessel, for a considerable coastline.
Belize's outstanding public sector debt with the United Kingdom totals about £16 million, all of which is owed to the Overseas Development Administration. For a small and comparatively poor country such as Belize, paying off those debts is a big strain on the economy. Because Belize is honourably making the payments, it does not qualify for debt relief. I understand the argument, but perhaps it is a little unsympathetic. Can nothing be done?
Last year, Her Majesty the Queen visited Belize—it was a triumph for her. Belize would welcome more high-level visits at this phase of its history. I am sure that the Minister will be anxious to see for himself that charming and friendly Commonwealth country. Our right hon. and learned Friend the Secretary of State for Defence has been there recently. I hope that my hon. Friend will also make a point of receiving the high commissioner for Belize before too long.
Belize feels that it falls between two stools when it deals with Whitehall. The Department of Trade and Industry tends to view it as a Caribbean country, while the Foreign Office emphasises the central American angle. Could not the approach of the two Departments be brought into line?
The main British Council office in the area is established in Jamaica. Naturally, Belize believes that the council should reopen an office in Belize, which would be of great assistance to central America. Is that a suggestion that the Minister feels able to support?
Belize has benefited under our bilateral aid programme. Will the Minister inform us of the Government's intentions?
The Minister will be well aware that the banana crop represents an impressive source of revenue for Belize. Its Minister of Foreign Affairs, Dean Barrow, wrote to our right hon. Friend the Minister of Agriculture in December about obtaining a just share of the important European Union market. I am told that Belize is very disappointed that it has been granted a quota of only 40,000 tonnes in the new EU quota system. Pipeline investment is in place to produce 100,000 tonnes.
In late 1993, before the decision was made, the then Prime Minister, George Price, submitted a report alerting the British Government and the European Commission. That report demonstrated the need for a 100,000-tonne quota. So far, no adequate adjustment has been made above 40,000 tonnes. There is serious concern that Belize might have to throw away many thousands of tonnes of

export-quality bananas, having no prospective alternative buyers. I hope that the Minister will either comment briefly on that topic tonight, or write to me in due course when he has had a chance to look into it.
I have put to the Minister the concern which I and a number of my colleagues feel about our relationship with Belize. I am a strong supporter of the Commonwealth, as the Minister knows. At the same time, I am a strong supporter of our European Union policy. I do not believe that they often conflict. Belize is a small and friendly Commonwealth country, and I hope that we shall go out of our way to emphasise our commitment to it and, at the same time, to the Commonwealth.

The Minister of State, Foreign and Commonwealth Office (Mr. David Davis): I welcome the opportunity to reply to this debate on a quiet Thursday evening. I particularly welcome the subject that my hon. Friend the Member for Bexleyheath (Mr. Townsend) has raised.
Britain's relations with Belize go back a long way. The original British settlement was established in about 1638. From then on, the main activity was logwood cutting for the European dye industry. It was not until the treaty of Paris in 1763 that Spain conceded to British settlers the rights to engage in the logwood industry. That was reaffirmed by the treaty of Versailles of 1783 and the convention of London of 1789. In 1862, Britain designated Belize as a British colony, and called it British Honduras. It has been known as Belize since 1973.
When Guatemala became independent in 1821, she claimed that she had inherited the previous Spanish title to British Honduras. However, in 1859, Guatemala signed and ratified the UK-Guatemala treaty in which she recognised the existing boundary between Guatemala and British Honduras. In 1939, however, Guatemala denounced the 1859 treaty and claimed Belize. In 1945, the Guatemalan Government wrote into its new constitution an article to the effect that Belize was an integral part of Guatemalan territory.
Although Belize had become self-governing in 1964, the Guatemalan claim delayed the setting in train of constitutional procedures leading to full independence. In 1980, the United Nations General Assembly called on Britain to convene a constitutional conference to bring Belize to early independence.
The constitutional conference was duly convened in April 1981 and, the following September, Belize became an independent state recognised by all nations except Guatemala, which maintained its claim. Following independence, a British garrison remained in Belize, with the full support of the Belizean Government, to counter any external threat to its security.
Recent years have been momentous in Belize's independent history. In 1991, the United Kingdom, our European partners and the international community as a whole welcomed recognition of Belize as a sovereign independent country by President Serrano of Guatemala. During 1992, the Guatemalan constitutional court and congress confirmed recognition of Belize. However, they did not renounce certain territorial claims on the country. That is of continuing concern to us, and we have been encouraging the two sides to reach agreement.
Increasingly, Belize's presence and role in the central American region has become fully accepted, including its attendance at central American summit meetings. I am glad to report to the House that, at the 11th annual ministerial meeting between Foreign Ministers of the European Union and central America, which I attended in Panama City on 24 February, Belize took part as an observer for the first time, and was represented by its distinguished Foreign Minister, Dean Barrow. Britain, and therefore the Foreign Office, played a crucial role in ensuring Belize's participation in that meeting. I recognised its presence there, as, subsequently, did a number of other countries, particularly Mexico.
My hon. Friend referred to the political prospects in Guatemala. The presidential election is due this autumn. So far, no candidates have declared themselves, so we cannot predict the outcome. We shall of course work with whoever is democratically elected.
It was against the background of that much-improved security in central America and Guatamala's recognition of Belizean independence, to which I have already alluded, that the Government reviewed Britain's defence relationship with Belize and the role of the British garrison. That was done in full consultation with the Government of Belize.
In May 1993, the then Minister of State, Foreign Office, my right hon. Friend the Member for Watford (Mr. Garel-Jones), informed the House that the garrison, which had been deployed in Belize since the year of my birth, would gradually reduce, during the following year or so, into a training operation for British troops, and that Belize would in due course assume responsibility for its own defence.
At the same time, we affirmed Britain's readiness to play a part in any consultation that the Belizean authorities might request about Belize's future security. We also undertook to maintain our programme of assistance to the Belize defence force and to sustain and improve the force's capability, and we gave an assurance that Belize would continue to be a beneficiary under Britain's bilateral aid programme.
In a joint statement with the Government of Belize during his visit in September 1993, the then Minister for the Armed Forces set out our plans for the garrison in fuller detail. It is gratifying to report that, since then, our plans have been accomplished in conditions of stability for Belize and for the region as a whole.
Belize assumed responsibility for its own defence on 1 January 1994. The reduction of the garrison was completed in September 1994, leaving a training team of about 100 permanent staff, including locally employed civilians, who are based at Airport camp.
I emphasise that the reduction of the garrison was a response to a much reduced external threat to Belize's security. In addition, the regional context is generally much more benign. Against that backdrop, it was natural for Belize, as a sovereign state recognised by the entire international community, to assume responsibility for its own defence.
However, those changes have not undercut Britain's defence links with Belize—far from it. There are regular company-strength deployments to Belize to take advantage of the resident training presence. There have

been training deployments by RAF Harriers. We are also committed to maintaining our programme of assistance for the development of the Belize Defence Force.

Mr. Cyril D. Townsend: Will my hon. Friend give way?

Mr. Davis: If I am to answer my hon. Friend's questions in any detail, I need to press on.
One and a half million pounds worth of equipment was donated to the defence force when the reduction of the British garrison was completed. British Loan Service personnel contributed to its training. We also sent short-term training teams to train the Belize defence force in specific skills, as well as arranging training courses in Britain for its key members. Ten defence force members will receive training in Britain this year.
Most of that training is financed by the Foreign and Commonwealth Office's United Kingdom military training and assistance scheme, for which I am responsible. I am glad that, in response to the importance attached to helicopter support by the Belize defence force, also mentioned by my hon. Friend the Member for Bexleyheath, my right hon. and learned Friend the Secretary of State for Defence makes available a number of flying hours for the defence force each month.
My hon. Friend mentioned Puma helicopters. The Government of Belize have never asked for Pumas, which I should tell him would involve a significant infrastructure cost, and there is no British defence requirement for them in Belize. He also mentioned the Royal Navy frigate. He is right that that Royal Navy frigate has called at Belize regularly, and I can tell him that it will continue to do so.
As hon. Members know, Britain's close and friendly links with Belize, the only member of the Commonwealth in central America, go much wider than defence links. They are perhaps symbolised by Her Majesty the Queen's visit last year to Belize, one of her realms. Ministerial visits are frequent, and included a visit to Belize in May 1994 by my right hon. and learned Friend the Secretary of State for Defence. In addition, my hon. Friend the Member for Upminster (Sir N. Bonsor), who is the Chairman of the House of Commons Defence Committee, visited Belize last month at the invitation of the Government of Belize.
The British aid programme is a practical expression of the British commitment to Belize's development. We expect to spend more than £5 million this year, which is about £30 for every Belizean citizen. Capital projects now completed include a new terminal building at the international airport, and the Big Falls bridge on the southern highway.
A number of road projects are under way or being planned, including the Stann creek valley road, which covers a 23 km stretch in a major citrus-growing area; an emergency resealing programme for 11 miles of the northern highway; the resurfacing of 66 miles of the northern highway from Belize city to the Mexican border; the appraisal for the resealing and rehabilitation of the western highway; and the construction of the southern highway, at a cost of £7.5 million.
We are co-operating with the World bank to improve the quality of primary education through curriculum and examination reform and teacher education. We are also about to enter the fourth year of a forestry planning and management project in support of the Belize tropical forestry action plan.
In the social sector, we are funding a community development project and a drug demand reduction programme—my hon. Friend rightly mentioned drugs. Our forward programme includes help with the introduction of value added tax and with the establishment of a social investment fund, which the World bank is supporting as a poverty reduction measure.
That bilateral programme is augmented by our multilateral aid through donors such as the European Community, which is building a new 112-bed hospital for Belize City. We are committed to maintaining a substantial aid programme for Belize to help the country meet the challenges of the 21st century.
My hon. Friend made some important remarks about the Belizean economy. The British aid programme makes a worthwhile contribution to Belize's steadily growing economy. Despite the withdrawal of the British garrison, the Belize economy grew by an estimated 1.6 per cent. in 1993–94. I should like to take this opportunity to congratulate the Belizean Government on their resolve in recently introducing an austerity budget designed to correct the current fiscal deficit.
My hon. Friend said that Belize has not been granted debt relief. Judged by agreed World bank criteria, Belize's debt burden is manageable, but if Belize sought to restructure its debts, the Paris Club would consider the case for debt relief on its merits, provided that Belize agreed a programme of economic reform with the International Monetary Fund. However, Belize has not, at least at this point, approached the Paris Club.
The economic links between Britain and Belize are increasingly based on private sector trade and investment. Its growth and success is the best assurance of Belize's continued economic progress. Major British investors in Belize include Barclays bank, Fyffes—of course, in bananas—the Commonwealth Development Corporation and Shell.
Britain is Belize's third biggest trading partner after the United States and Mexico, its neighbours. Our exports were almost £12 million in 1994. Principal exports are chemicals, industrial buildings, beverages, manufactured materials, food stuffs and generating equipment. Our imports from Belize, which totalled almost £40 million in 1994, included sugar, bananas, citrus, honey, vegetables and clothing.
My hon. Friend mentioned bananas. I cannot give him a definitive answer to his question today, but I shall, as he asked me, write to him on the matter, as I understand that it is of considerable significance to Belize.
My hon. Friend also asked me about the treatment of Belize as a central American or Caribbean country by ourselves and the Department of Trade and Industry. Geographically, Belize is clearly a central American country. We are pleased that it is increasingly participating in regional activities there—that is part of the effort that we have made in the past few years. But, as a Commonwealth country, Belize has much in common with countries in the Caribbean. It benefits from a substantial British aid programme and preferential access to the European market under the Lome convention. There are advantages in the two approaches, and I should not play them down.
It is against that background of regional stability and co-operation, and increasing prosperity in Belize, that I am glad to welcome the good relations established between Belize and Guatemala. Those good relations are due to a constructive approach on both sides, and will, I hope, eventually lead to a final settlement of the territorial dispute between the two countries. Meanwhile, it is encouraging that the problems that occasionally arise on the long frontier between Belize and Guatemala are successfully resolved by good will and flexibility on both sides—a process to which I hope we can contribute in future.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.